It is 1998.The spot and 30-day forward rates for the Dutch guilder are $.3075 and $.3120,respectively.The guilder is said to be selling at a forward

Question

Quizplus · Accepted Answer

We can calculate the forward premium or discount as:
((Forward rate - Spot rate) / Spot rate) * (360/30)

Plugging in the given values, we get:
((0.3120 - 0.3075) / 0.3075) * (360/30) = 0.1756 or 17.56%

Since the forward rate is higher than the spot rate, the guilder is selling at a forward premium. Therefore, the correct choice is B.

It Is 1998