If spot USD/INR is 50, and six months forward rate is 51 then AFM is ____________
A)1%
B)4%
C)2%
D)3%

Name: If spot USD/INR is 50, and six months forward rate is 51 then AFM is ____________ A)1% B)4% C)2% D)3%
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Question

Quizplus · Accepted Answer

The Annualized Forward Margin (AFM) is calculated using the formula: [(Forward Rate - Spot Rate) / Spot Rate] * (12 / Number of Months) * 100. Here, it is: [(51 - 50) / 50] * (12 / 6) * 100 = 4%.

If Spot USD/INR Is 50, and Six Months Forward Rate