Given the following quotations (where the dollar is the home currency) , what is the annualized forward premium (discount) on the U.S. dollar?
Spot rate: $1.305/euro 6-month forward rate: $1.335/euro
A) premium; 4.4944%
B) premium; 4.5977%
C) discount; 4.4944%
D) discount; 4.5977%
Correct Answer:
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