The spot Peso/US$ exchange rate is US$10.9892/US$. The 3-month forward rate is US$11.0408/US$. What is Peso's forward premium (or discount) on the US dollar, expressed as an annual rate? (approximately)
A) 0.83% premium
B) 1.9% discount
C) 2.1% premium
D) None of the above
Correct Answer:
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