Assume a currency is more expensive in the forward market than in the spot market relative to the U.S.dollar.When this occurs the currency is said to be selling at:

Question

Quizplus · Accepted Answer

When a currency is more expensive in the forward market than in the spot market relative to the U.S. dollar, it is said to be selling at a premium relative to the dollar. This implies that the currency is expected to appreciate in value over time against the dollar, which is reflected in the higher forward rate for the currency.

Assume a Currency Is More Expensive in the Forward Market