If the spot rate of the Israeli shekel is 5.51 shekels per dollar and the 180-day forward rate is 5.76 shekels per dollar,then the forward rate for the Israeli shekel is selling at a(n)______________ to the spot rate.
A) 3.68% premium
B) 3.72% premium
C) 4.99% discount
D) 4.54% discount
E) 5.58% discount

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Quizplus · Accepted Answer

11ea856c_8b05_da17_9aec_e59c4ed8b5fe_TB1222_00 ?
Because one can obtain more Israeli shekels for a dollar in the forward market,the forward currency is selling at a discount to the spot rate.The amount of the discount is calculated as: (Forward rate - Spot rate)/Spot rate 11ea856c_8b05_da18_9aec_27599ab93f1c_TB1222_00

If the Spot Rate of the Israeli Shekel Is 5