Why currency forward rate formula is below?

instead of

**F= S*(1+RA)^T/(1+RB)^T ; T= (days/360)**

I think it’s more close to forward rate general form F=S* (1+R)^T??

Why currency forward rate formula is below?

instead of

**F= S*(1+RA)^T/(1+RB)^T ; T= (days/360)**

I think it’s more close to forward rate general form F=S* (1+R)^T??

The Economics reading assumes that interest rates are nominal (e.g., LIBOR) while the Derivatives reading assumes that they’re effective.

I wrote an article on this: http://financialexamhelp123.com/mark-to-market-value-of-a-currency-forward-contract/. At the bottom there’s a reconciliation of the Econ and Derivatives formulae.

Wow, cool! Financial Exam Help 123

Sorry i’m not really sure what **nominal** and **effective** means@@

Could you please help eleborate it? Thanks.

Here’s the article I wrote on that very question: http://financialexamhelp123.com/nominal-vs-effective-interest-rates/.

S2000magician:

FrankCFA: S2000magician:The Economics reading assumes that interest rates are nominal (e.g., LIBOR) while the Derivatives reading assumes that they’re effective.

I wrote an article on this: http://financialexamhelp123.com/mark-to-market-value-of-a-currency-forward-contract/. At the bottom there’s a reconciliation of the Econ and Derivatives formulae.

Wow, cool! Financial Exam Help 123

Sorry i’m not really sure what

nominalandeffectivemeans@@Could you please help eleborate it? Thanks.

Cool! Magic.

Many thank!

My pleasure.