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ICMA Exam FMFQ Topic 2 Question 60 Discussion

Actual exam question for ICMA's FMFQ exam
Question #: 60
Topic #: 2
[All FMFQ Questions]

Which of the following is not a factor in determining a fair value forward fx price?

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Suggested Answer: D

by Daryl at Jul 02, 2024, 12:03 PM

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William
3 months ago
Haha, this is too easy. The answer is clearly D - my crystal ball is in the shop, so I can't predict the future. What kind of question is this anyway?
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Levi
2 months ago
Yeah, I always struggle with questions like this. But D seems like the most logical choice.
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Twana
2 months ago
I agree, it's definitely D. Predicting future rates is always tricky.
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Hildegarde
3 months ago
Haha, this is too easy. The answer is clearly D - my crystal ball is in the shop, so I can't predict the future. What kind of question is this anyway?
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Vi
3 months ago
D) View on where rates will be at the forward date
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Sang
3 months ago
C) Interest rate in the quoted currency
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Louis
3 months ago
B) Interest in the base currency
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Antione
3 months ago
A) Spot rate
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Martin
4 months ago
You're right, I didn't consider that. It could be C) Interest rate in the quoted currency.
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Jean
4 months ago
I'm going with C. The quoted currency rate is crucial, otherwise how would you know the real value of the forward contract? Duh!
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Rasheeda
2 months ago
I see your point, but I still think C is the correct answer. The interest rate in the quoted currency plays a significant role in determining the fair value.
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Nieves
2 months ago
I agree with you, but I'm leaning towards D. Having a view on where rates will be at the forward date can also impact the fair value.
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Lang
2 months ago
I think it's A. The spot rate is definitely important in determining the fair value of a forward fx price.
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Adelaide
2 months ago
I see your point, but I still think it's C. The interest rate in the quoted currency plays a big role in determining the fair value forward fx price.
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Sonia
3 months ago
I agree with you, the spot rate is important. But I'm going with D. Your view on where rates will be at the forward date is also crucial.
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Leslee
3 months ago
I think it's A. The spot rate is definitely a factor in determining the fair value forward fx price.
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Alline
4 months ago
It's gotta be A! The spot rate is the foundation, everything else just adjusts the price from there. This question is a piece of cake!
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Alaine
4 months ago
But the interest rate in the quoted currency is also important, so it could be C) Interest rate in the quoted currency.
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Martin
4 months ago
I disagree, I believe the answer is B) Interest in the base currency.
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Gail
4 months ago
Hmm, I think the correct answer is D. The forward FX price is determined by the spot rate, interest rates in both currencies, and the time to maturity. Your personal views on future rates shouldn't factor in.
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Viva
3 months ago
Yeah, D makes sense. It's more about the current rates and not personal predictions.
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Fallon
3 months ago
I agree, D is the correct answer. It's all about the spot rate and interest rates.
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Alaine
5 months ago
I think the answer is D) View on where rates will be at the forward date.
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