Lammer plc, june 2006Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Lammer plc, june 2006This topic has 1 reply, 2 voices, and was last updated 4 years ago by John Moffat.Viewing 2 posts - 1 through 2 (of 2 total)AuthorPosts October 27, 2020 at 12:06 pm #593245 maryam20MemberTopics: 3Replies: 20☆Hello Sir,I have been given two forward exchange rates in this question which are as follows:One year rate- 1.8901 3 month rate- 1.9066And I need to calculate the 5 month forward exchange rate which I am confused how to.In the answer, this is how they have calculated: (1.9066*7/9)+(1.8901*2/9)=1.9029Can you please explain the logic behind this? Thanks. October 27, 2020 at 2:51 pm #593267 John MoffatKeymasterTopics: 57Replies: 54648☆☆☆☆☆The answer is just apportioning between the two rates.I think it is more obvious to do it the following pay:There are 9 months between the one year rate and the 3 month rate. There are 2 months between the 5 month rate and the 3 month rate.So the 5 month rate = 1.9066 – 2/9(1.9066 – 1.8901) = 1.9029AuthorPostsViewing 2 posts - 1 through 2 (of 2 total)You must be logged in to reply to this topic.Log In Username: Password: Keep me signed in Log In