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Feedback for Current spot exchange rate between Euro & Pound is 0.91 £/€. In UK, 2 year continuously compounded risk-free rate is 4% and in Europe it is 6%. Calculate 2-year forward rate?

In the explanation the domestic and foreign rates are incorrectly plotted. Domestic is GBP (and rate is 4%), foreign is EUR (and interest rate is 6%). Further, since the question mentions the rate are already 2 year continuously compounded, multiplying by 2 is not required. Correct answer is 0.8919.

Location: Quiz B3C09 Foreign Exchange Markets

In the explanation the domestic and foreign rates are incorrectly plotted. Domestic is GBP (and rate is 4%), foreign is EUR (and interest rate is 6%). Further, since the question mentions the rate are already 2 year continuously compounded, multiplying by 2 is not required. Correct answer is 0.8919.

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