21.6 Forward rate: Explain the relationship between each pair of currencies. Spot Rate $1.655/ £ ¥104.45/$...

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21.6 Forward rate: Explain the relationship between each pair of currencies. Spot Rate $1.655/ £ ¥104.45/$ C$ 1.1121/$ Forwar

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Answer 1

Answer #1

The spot rate is more than forward rate, it would be a loss if entered into a forward agreement.
Here also the same thing has happened.
In this case too, spot rate is higher than forward rate.

In all the three cases as you can observe clearly it is spot rate which is higher than spot rate, this means that entering into a forward agreement would result is a loss of foreign exchange.

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Answer 2

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