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Basic Question 4 of 14
A ______ exists when the ______ is higher than the spot rate.
B. discount; futures rate
C. premium; forward rate
A. discount; forward rate
B. discount; futures rate
C. premium; forward rate
User Contributed Comments 3
| User | Comment |
|---|---|
| Shaan23 | The dollar would quote at a premium but the chinese would be at a discount. |
| maryprz14 | 6.3100 - 6.2935 = 0.0156? |
| myron | check your math @maryprz14: it is 0.0165. |
I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
explain the arbitrage relationship between spot and forward exchange rates and interest rates, calculate a forward rate using points or in percentage terms, and interpret a forward discount or premium
CFA® 2024 Level I Curriculum, Volume 1, Module 8.