If a dollar will buy fewer units of a foreign currency in the forward market than in the spot market, then the forward currency is said to be selling at a premium to the spot rate.

Question

Quizplus · Accepted Answer

If the forward currency is selling at a higher price than the spot currency, it is considered to be at a premium. This means that the foreign currency is more expensive in the forward market than in the spot market.

If a Dollar Will Buy Fewer Units of a Foreign