Foreign Exchange Currencies and Spot-Forward Rate

CFA Level I
#1

Helo,

i would like to ask about forex spot-forward currency.

it seems thats cfai purposely using the second currency as the base currency.

example. aud/usd 1.07, meaning 1 usd equals to 1.07 aud when in fact the common way to quote is the first currency is the base currency.

The implication goes further to the forward rate formula = spot * (1+rf/1+rd) first i studied the cfa way and somehow in my college they use the first currency as the base and it just confuse me a lot.

Do you have any good methodology to figure this thing out and clear out the confusions?

Thanks in advance

#2

I wrote an article on this that may be helpful: http://financialexamhelp123.com/currency-exchange-rates/.

#3

Thanks for the quick reponse :slight_smile: Checking