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Assuming the 30-day forward exchange rate were $1 = ¥130 and the spot exchange rate were $1 = ¥120, the dollar is selling at a _____ on the 30-day forward market.A. PremiumB. MarginC.DiscountD. Subsidy

Respuesta :

Answer:

The answer is letter A. PREMIUM

Explanation:

Assuming the 30-day forward exchange rate were $1 = ¥130 and the spot exchange rate were $1 = ¥120, the dollar is selling at a ___premium__ on the 30-day forward market.

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Answer:

The dollar is selling at a premium on the 30-day forward market.

Explanation:

This is a direct quote in which home currency is fixed and foreign currency is variable. The spot rate is $120. A 30-day forward premium of $10 is added to the spot rate in order to obtain the 30-day forward rate.

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