If the forward price of a currency contract is higher than the spot rate,the currency is said to be at a

Question

Quizplus · Accepted Answer

When the forward price of a currency contract is higher than the spot rate, the currency is said to be at a forward premium. This means that the market expects the currency to be worth more in the future than it is currently. On the other hand, when the forward price is lower than the spot rate, the currency is at a forward discount, indicating that the market expects the currency to be worth less in the future than it is currently.

If the Forward Price of a Currency Contract Is Higher