The Following Are the Prices in the Foreign Exchange Market

question 52

Multiple Choice

The following are the prices in the foreign exchange market between the Canadian dollar and another local currency (LC) . $$\begin{array} { l l } \text { Spot } & \$ 0.02465 / \mathrm { LC } \\\text { 3-month forward } & \$ 0.02473 / \mathrm { LC } \\\text { 6-month forward } & \$ 0.02474 /\mathrm { LC }\end{array}$$ What was the discount or premium on 3-month forward for LC?

• A) 1.298% premium
• B) 0.0325% premium
• C) 0.0325% discount
• D) 1.298% discount

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