If the Spot Rate Between the U

question 54

Multiple Choice

If the spot rate between the U.S. dollar and the Mexican peso is $1 = 2.45 peso and the 3-month forward rate is $1 = 2.05 pesos, is the forward peso selling at a discount or a premium?

• A) Discount
• B) Premium
• C) Unable to determine with the cross-rates

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