If the Spot Rate of the British Pound Is $2

question 44

Multiple Choice

If the spot rate of the British pound is $2, and the 180-day forward rate is $2.05, what is the annualized premium or discount?

• A)2.5 percent discount
• B)2.5 percent premium
• C)10 percent premium
• D)5 percent discount
• E)5 percent premium

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