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Basic Question 0 of 29
Suppose the forward discount for the dollar is 2% per year, and the current spot rate is 108.40Yen/$. Based on the hypothesis of uncovered interest rate parity, what is the expected spot rate in one year?
User Contributed Comments 1
| User | Comment |
|---|---|
| GileOne | 108.40 * 0.98=106.23 |
I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz
Learning Outcome Statements
explain international parity relations (covered and uncovered interest rate parity, forward rate parity, purchasing power parity, and the international Fisher effect);
describe relations among the international parity conditions;
evaluate the use of the current spot rate, the forward rate, purchasing power parity, and uncovered interest parity to forecast future spot exchange rates;
explain approaches to assessing the long-run fair value of an exchange rate;
CFA® 2025 Level II Curriculum, Volume 1, Module 8.