This is the formula to calculate a spot rate for currency: Spot Rate = Forward Rate / (1 + Domestic Interest Rate) x (1 + Foreign Interest Rate). You can use a formula or an online calculator to ...

The one year forward rate represents the one-year interest rate one year from now. You would solve the formula (1.04)^2=(1.02)(1+F1). F is 6.03%. Now calculate the two-year forward rate one year ...

Peter Gratton, M.A.P.P., Ph.D., is a New Orleans-based editor and professor with over 20 years of experience in investing, risk management, and public policy. Peter began covering markets at ...