Hi all, I am having a problem figuring out how to work out the BID-FORWARD exchange rate for Q20 in CFAI Book 2 : Reading 18 page 656. The solution shows steps and explanations to work out the ASK-forward (pg 661), but I am confused whether to borrow/lend Yen to get the Bid-forward… I’d greatly appreciate any help from you all. Thanks a lot!

Remember rule of ABC. (it is my copyrighted rule :-)) A for Ask, B for Borrowing interest rate, C for counter currency For calculation of Forward Ask rate, use borrowing rate of counter currency in the numerator. Of course, we should use the opposite (lending rate of base currency ) in denominator. For calculation of Forward Bid rate, use lending rate of counter currency in the numerator. Of course, we should use the opposite (borrowing rate of base currency ) in denominator.