Which of the following instances indicates that the dollar is selling at a premium on the 30-day forward market?
A) The spot exchange rate is currently $1 = ×120 and changes to $1 = ×130 after 30 days.
B) The spot exchange rate is currently $1 = ×120 and changes to $1 = ×110 after 30 days.
C) The current spot exchange rate is $1 = ×120 and the 30-day forward rate is $1 = ×110 after 30 days.
D) The current spot exchange rate is $1 = ×120 and the 30-day forward rate is $1 = ×130 after 30 days.
E) The current spot exchange rate is $1 = ×120 and the 30-day forward rate is $1 = ×120.
Correct Answer:
Verified
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