I’m watching the Schweser videos for 2008 Econ. I have a question, for the Interest rate parity formula the professor uses F/S = (1+rd)/(1 + rf) But the CFAI books have the opposite formula? It has F/S = (1+rf)/(1+rd) I’m not sure?
It all depends whether the fwd/spot rate are being quoted in Foreign Currency/Domestic or the inverse Domestic/Foreign. Whichever method is used has to be the same order for the int rates.
I think the video said Direct quotes. But the CFAI is using Indirect quote Foreign/Domestic.