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 U.S. dollar and another local currency (LC) . $$\begin{array} { l l } \text { Spot } & \$ 0.03112 / \mathrm { LC } \\3 \text {-month forvard } & \$ 0.03117 / \mathrm { LC } \\6 \text {-month forward } & \$ 0.03118 / \mathrm { LC }\end{array}$$ What was the approximate discount or premium on a three-month forward for LC?

• A)0.643% premium
• B).013% premium
• C).013% discount
• D)0.643% discount