# Question 26 currency exchange rates

Hello guys,

I hope you can help me about the question 26 of currency exchange rates.

The objective is calculate de mark-to-market value. The only thing i do not understand is how they know the forward points that is - 0.0016.

The information given is the following USD/CHF quotes are currently available in the market:

Spot   1.0301/1.0302

30 days 1.033613

90 days 1.081081

180 days 1.061798

In this problem we entered into a 180-day forward contract 90 days ago.

So, I do not know how they have calculated the ( - 00.16) forward points with this information, that for me is different in relation to the others problems.

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You need to tell us what rate they sold the original forward contract at - assuming they sold since spot is below the 90 day forward price and the answer is negative.

¯\_(ツ)_/¯ It be like that sometimes.

Thanks for answering, the exercise is;

90 days ago, we entered into a 180-day forward contract to purchase 1 million CHF at an all-in rate of \$1.0225/CHF.

The quotes USD/CHF currently available in the market:

Spot 1.0301/1.0302

30 days 1.033613

90 days 1.081081

180 days 1.061798

Interest rate:

90day CHF 1.02%

180day CHF 1.03%

90day USD 1%

180day USD 0.99%

This is all the information of the question. I dont understand why the forward all-in bid price is 1.0301 - (0.0016) = 1.0285

The (-0.0016) i dont know how they know it.

Thanks!

Is this ques from CFA topic tests or from some other source? I cud not find it in cfai text

This question is from scheweser qbank, part of economics, currency exchange rates, question 26