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Forums › ACCA Forums › ACCA FM Financial Management Forums › exchange rate
in section B question, normally will be given (Spot exchange rate) and (Six-month forward rate). how to identify which to in a questions
If your confused about the difference between the two then the spot exchange rate is the exchange rate that is applicable today if we exchange the currency the forward exchange rate is sort of a prediction of what the spot rate will be in the future calculated by the interest rate parity.
If you mean, how will you know which one is the spot rate, and which is the forward rate in the exam, then the question will clearly state which one is which or will ask you to calculate forward rate using the spots rate, but it will clearly state that which is spot rate