If the AUD/CAD spot exchange rate is 0.9875 and 60-day forward points are −25, the 60-day AUD/CAD forward rate is closest to: A. 0.9900. B. 0.9850. C. 0.9870.
For an exchange rate quoted to four decimal places, forward points are expressed in units of 0.0001. The 60-day forward rate is 0.9850 + 0.0001(−25) = 0.9850. The CAD is trading at a 60-day forward discount to the AUD.
