CFAI Practice: M08 — Exchange Rate Calculations

Total: 5 questions

Source: CFA Institute Practice Questions — Economics (2026)


Question 1

Given the following spot rates: USD/EUR = 1.1200 and USD/GBP = 1.3100, the GBP/EUR cross rate is closest to:

  • A. 0.8550
  • B. 1.1696
  • C. 1.4672

Question 2

The one-year interest rate is 3% in the domestic country and 5% in the foreign country. According to covered interest rate parity, the domestic currency one-year forward rate will most likely be at a:

  • A. forward premium relative to the spot rate
  • B. forward discount relative to the spot rate
  • C. forward rate equal to the spot rate

Question 3

The USD/CHF spot rate is 0.9200 and the 90-day forward rate is 0.9150. The Swiss franc is trading at a 90-day forward:

  • A. premium
  • B. discount
  • C. par

Question 4

A dealer quotes the EUR/USD spot rate as 1.0850/1.0855. The bid-ask spread in pips is:

  • A. 3 pips
  • B. 5 pips
  • C. 50 pips

Question 5

A currency dealer quotes USD/JPY spot at 145.00 and 3-month forward points at +25. The 3-month outright forward rate is closest to:

  • A. 144.75
  • B. 145.25
  • C. 147.50