Suppose That What Is the Annualized Percentage Discount or Premium of the

question 39

Multiple Choice

Suppose that: $$\begin{array}{l}\begin{array} {lll } \text {U.K. (pound) }&\frac { \text { Spot Rate } } { 1.5331 }&\frac { 3 \text { Month Forward Rate } } { 1.5372 }&\frac { 1 \text { Year Forward Rate } } { 1.5502 }\end{array}\end{array}$$ What is the annualized percentage discount or premium of the U.K.pound on the U.S.Dollar?

• A)1.10% premium
• B)1.10% discount
• C)2.20% premium
• D)2.20% discount