Skip to content
ACCA exam results — Are you ready?Chat about it >>

ACCA Forums

FMSpecimen exam - forward rate

IIsabelle11y ago
Hi, I need help with Q2 from section A, specimen exam. the formula for forward rate is: spot rate x (1+int rate foreign country)/(1+int rate in base country). Why do the ad the last bit at the power of 0.5? I know the formula is for fwd rate in 1 year time and the answer should be in 6 months time. However, I don't understand..... Many thanks, Gabi
Mmuriela11y ago#1
Power of 0.5 is 6 months like power of 1 is 12 months. Magda
Sign in to reply to this topic.