OmarAdnan

cpk123 wrote:
did you stop after seeing the formula in my type up?
Logic behind: When you buy a currency forward - you sold your domestic currency and bought the foreign currency. So you receive the foreign interest rate rfc and gave them your domestic interest rate.
No, I read it, and the logic makes sense for value:
Discount the spot price at the rFC, and the forward price at the rDC. And you subtract them because the rDC is what you’re giving up. I get it. I’m just having trouble seeing the connection to price…