Q7. The forward rate on a 90-day contract is 5 DC/$ and the spot is 4 DC/$. The $ is trading at a forward:

A)   discount of 1.0.

B)   premium of 1.0.

C)   premium of 0.8.

Q8. If the forward rate expressed in domestic currency units is above the spot rate, then the foreign currency is at a:

A)     spot discount.

B)     forward premium.

C)     forward discount.

Q9. Today, the spot rate on Japanese yen is $0.008000 and 180-day forward yen are priced at $0.008250. The annualized forward premium is:

A)    6.250%.

B)    3.125%.

C)    6.060%.

答案和详解如下：

Q7. The forward rate on a 90-day contract is 5 DC/$ and the spot is 4 DC/$. The $ is trading at a forward:

A)   discount of 1.0.

B)   premium of 1.0.

C)   premium of 0.8.

Correct answer is B)

A foreign currency is at a forward premium if the forward rate expressed in dollars is above the spot rate. Forward premium = forward rate – spot rate = 5 − 4 = 1.

Q8. If the forward rate expressed in domestic currency units is above the spot rate, then the foreign currency is at a:

A)     spot discount.

B)     forward premium.

C)     forward discount.

Correct answer is B)

A foreign currency is at a forward premium if the forward rate expressed in domestic currency is above the spot rate. Forward premium = forward rate – spot rate.

Q9. Today, the spot rate on Japanese yen is $0.008000 and 180-day forward yen are priced at $0.008250. The annualized forward premium is:

A)    6.250%.

B)    3.125%.

C)    6.060%.

Correct answer is A)

Forward premium = ($0.008250 − $0.008000) / $0.008000 × (360 / 180) = 0.0625 = 6.25%.

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