Which of the Following Is Correct If the Spot Exchange $\le$

question 6

Multiple Choice

Which of the following is correct if the spot exchange rate on the pound sterling is $2.56 (Canadian) / $\le$ and the one-year forward exchange rate is $2.48 (Canadian) / $\le$ ? The pound is trading:

• A)At a 3.13% forward discount relative to the Dollar
• B)At a 3.13% forward premium relative to the Dollar
• C)At a 3.22% forward discount relative to the Dollar
• D)At a 3.22% forward premium relative to the Dollar