The SF/$ spot exchange rate is SF1.25/$ and the 180 day forward exchange rate is SF1.30/$.The forward premium (discount) is
A) the dollar trading at an 8% premium to the Swiss franc for delivery in 180 days.
B) the dollar trading at a 4% premium to the Swiss franc for delivery in 180 days.
C) the dollar trading at an 8% discount to the Swiss franc for delivery in 180 days.
D) the dollar trading at a 4% discount to the Swiss franc for delivery in 180 days.
Correct Answer:
Verified
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