Can anyone explain why the answer is 6.452 instead of 6.475. What am I missing here?
Question: The spot rate of chinese yuan per canadian dollar is 6.4440. If the Canadian interest rate is 2.50% and the Chinese interest rate is 3.0%, the 3-month noarbitrage foward rate is closest to:
Answer: 6.452 CNY/CAD.
I used the formula of fwd=spot x(1+i china/1+ i canada).
Thank you,