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3I0-012 · Question #15

3I0-012 Question #15: Real Exam Question with Answer & Explanation

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Question

Assuming a flat yield curve in both currencies, when quoting a 1- to 2-month forward FX time option price in a currency pair trading at a discount to a customer:

Options

  • Ayou would take as bid rate the bid side of the 2-month forward and as offered rate the offered side of
  • Byou would take as bid rate the offered side of the 2-month forward and as offered rate the bid side of
  • Cyou would take as bid rate the offered side of the 1-month forward and as offered rate the offered side
  • Dyou would take as bid rate the bid side of the 1-month forward and as offered rate the bid side of the

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