Reading 18: Currency Exchange Rates - LOS g ～ Q7-9 white, black, forward, contract, class

mayanfang1

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%.

annyyu

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沙胖胖

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