ACI
3I0-012 · Question #14
A 12-month EUR/USD swap is quoted at 41/44. EUR interest rates are expected to fall, with USD interest rates remaining stable. Assuming no change in the spot rate what effect would you expect on the…
The correct answer is C. Move towards 5 7/60. See the full explanation below for the reasoning.
Question
A 12-month EUR/USD swap is quoted at 41/44. EUR interest rates are expected to fall, with USD interest rates remaining stable. Assuming no change in the spot rate what effect would you expect on the forward points?
Options
- AUnchanged
- BMove towards 28/31
- CMove towards 5 7/60
- DInsufficient information
How the community answered
(30 responses)- A17% (5)
- B10% (3)
- C70% (21)
- D3% (1)
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