Forex Spot and Forward Illustration 10


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A bank is quoting the following rates:

DEM/$ spot : 1.5975/80

2 – month : 20/10

3 – month : 25/15

Saudi Riyals/$ spot : 3-7550/60

2 – month : 20/40

3 – month : 30/40

A firm wishes to buy Riyals against DEM 3 month forward, what rate will the bank quote.

(Mumbai University, October 2002)

(Ans.: Hence, bank will quote 2.3539 Saudi Riyals/DEM)


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