- CFA Exams
- CFA Exam: Level II 2021
- Study Session 4. Economics
- Reading 10. Currency Exchange Rates: Understanding Equilibrium Value
- Subject 2. Foreign exchange forward markets
CFA Practice Question
When forward points are added to the spot rate, there is a:
B. forward discount.
C. It has nothing to do with forward premium or discount.
A. forward premium.
B. forward discount.
C. It has nothing to do with forward premium or discount.
Correct Answer: A
When points are subtracted from the spot rate, there is a forward discount.
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