If the spot for the British pound (GBP) is $1.6950/GBP and the 30-day forward rate is $1.6921/GBP, then the pound is trading at a ________ in the 30-day market.

Question

Quizplus · Accepted Answer

The 30-day forward rate of $1.6921/GBP is lower than the current spot rate of $1.6950/GBP, indicating that the pound is trading at a discount in the 30-day market. This means that buyers in the forward market are willing to pay less for the pound in the future than they would pay for immediate delivery.

If the Spot for the British Pound (GBP) Is $1