If a dollar will buy fewer units of a foreign currency in the forward market than in the spot market,then the foreign currency is said to be selling at a premium to the spot rate.

Question

Quizplus · Accepted Answer

If the forward rate is higher than the spot rate, it means that the foreign currency is selling at a premium, meaning that it is more expensive to buy the foreign currency in the future than it is in the present.

If a Dollar Will Buy Fewer Units of a Foreign