If the spot price of the Swiss franc is $0.4020 and the 90-day forward franc sells for $0.4026, then the franc is at a 90-day forward discount of $0.0006 or at a 0.2 percent forward discount per annum against the dollar.

Question

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The franc is at a forward premium, not a discount. The forward price ($0.4026) is higher than the spot price ($0.4020), indicating that the franc is expected to appreciate against the dollar, not depreciate.

If the Spot Price of the Swiss Franc Is $0