schweser book 5 derivatives pg 54, #7, how do you know in the formula it’s US rate-UK rate? Maybe because the spot we’re dealing with is in dollars, so put the dollar interest rate first? Thanks, Andrew
When the question mentions spot in terms of “Currency A per Currency B” then make Curr A your domestic currency and put the corresponding interest rate on the numerator. So yes, the question says “Spot = $1.65 per Pound”
Thanks Iginla