The forward points are calculated from:
A) The level of interest rates in the base currency
B) The level of interest rates in the quoted currency
C) The interest rates in the two currencies
D) Your expectations of the future spot rate

Question

Quizplus · Accepted Answer

Forward points are calculated based on the difference between the interest rates of the two currencies involved in the transaction. Therefore, option C is the correct choice. Option A and B relate to interest rate differentials, but do not fully capture the calculation of forward points. Option D refers to expectations of future spot rates, which is not directly related to the calculation of forward points.

The Forward Points Are Calculated From