The one-year forward rate of the British pound is quoted at $1.60, and the spot rate of the British pound is quoted at $1.63. The forward ____ is ____ percent.
A) discount; 1.9
B) discount; 1.8
C) premium; 1.9
D) premium; 1.8

Name: The one-year forward rate of the British pound is quoted at $1.60, and the spot rate of the British pound is quoted at $1.63. The forward ____ is ____ percent. A) discount; 1.9 B) discount; 1.8 C) premium; 1.9 D) premium; 1.8
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Question

Quizplus · Accepted Answer

(F/S) - 1 = ($1.60/$1.63) -1 = -1.8 percent.

The One-Year Forward Rate of the British Pound Is Quoted