Which of the following statements is correct?
A) When the interest rate is lower in the commodity currency, it is offered at a forward premium.
B) When the interest rate is higher in the commodity currency, it is offered at a forward premium.
C) When the interest rate is higher in the terms currency, the commodity currency is offered at a forward discount.
D) When the interest rate is higher in the terms currency, it is offered at a forward premium.
E) When the interest rate is lower in the terms currency, it is offered at a forward discount.
Correct Answer:
Verified
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