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    Question

    If the forward value of the currency is cheaper, the

    currency is called -
    A At premium Correct Answer Incorrect Answer
    B At discount Correct Answer Incorrect Answer
    C At par Correct Answer Incorrect Answer
    D At value Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Forward Rate = Spot Rate +Premium- Discount  If the forward value of the currency is higher than (costlier) the spot (present) value than the currency is at Premium. If the forward value of the currency is cheaper than the spot (present) value than the currency is at Discount.

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