thos of you that have the schweser notes can someone please explain to me why answer for #11 (german porfolio manager) uses power of 2/12 instead of 2/3? the questions says that he entered a 3-month forward contract and the spot rate is given a month into it…is this an error or am i missing something?
even reading your question makes the answer clear . It is obviously an annualized rate , so if two month are left in the contract the FV will grow by rate ^(1+2/12)