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c) If the US$’s spot rate is Ksh.103 and its one-year forward rate has a forward...

c) If the US$’s spot rate is Ksh.103 and its one-year forward rate has a forward premium of 5%.. Required: Calculate the 1-year forward rate.

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Answer #1

1-year forward rate = spot rate*(1+premium%)

=103*(1+0.05) = 108.15

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