The Following Are the Prices in the Foreign Exchange Market

question 103

Multiple Choice

The following are the prices in the foreign exchange market between the Canadian dollar and United States dollar (USD) . $$\begin{array} { l l } \text { Spot } & \$ 0.7786/ \text { USD } \\\text { 3-month forward } & \$ 0.7988/ \text { USD } \\\text { 6-month forward } & \$ 0.8304/ \text { USD }\end{array}$$ What was the discount or premium on 3-month forward and 6 month for United States dollars?

• A) 2.59 % premium/ 6.65% premium
• B) 2.59 % discount/ 6.65% discount
• C) 10.38% premium/13.31% premium
• D) 10.38% discount/13.31% discount