Comfortable with derivatives? try this.

for a european investor 180 dividend 5$ 180 euribor 2.5% 360 euribor 3.5% 180 tbill priced at 98.5 360 tbill priced at 97 price of US stock 100$ EUR-USD = 1.25 what is the price of a 360 day euro forward contract closest to? A) 1.238 B) 1.244 C) 1.256 what is the price of a 360 day forward contract on US stock closest to? A) 97.93 B) 98.07 C) 103.00 i somewhat modified the question from CFAI sample. the answer is still the same though. real question is, there a reason why we use US rates for forward contract on stock even for a european investor?

1 B 2 A yes because the STOCK IS IN THE US!