The 90-Day Forward Rate for the Euro Is $1

question 44

Multiple Choice

The 90-day forward rate for the euro is $1.07, while the current spot rate of the euro is $1.05. What is the annualized forward premium or discount of the euro?

• A) 1.9 percent discount.
• B) 1.9 percent premium.
• C) 7.6 percent premium.
• D) 7.6 percent discount.

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Definitions:

Commission Rate

The percentage of a sale price that is paid to an agent or employee for their sales efforts or services.

Stockbroker

A professional who buys and sells stocks and other securities for clients in exchange for a fee or commission.

Transaction

An agreement or communication carried out between a buyer and a seller to exchange an asset for payment.

Overtime

The amount of time someone works beyond the normal working hours, often resulting in additional pay.