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LGmashups - Lily Gilbert
on Dec 02, 2024

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If the direct quote, forward exchange rate is higher than the spot rate, the forward currency is trading at a:

A) spot rate.
B) discount.
C) premium.
D) forward spot rate.

Direct Quote

A representation of the exchange rate between two currencies, stating how much of the home currency is required to buy one unit of the foreign currency.

Forward Exchange Rate

The price agreed upon for a currency transaction that will occur at a future date, used to hedge against currency risk.

Premium

An amount paid in addition to the standard or nominal amount, often for insurance, superior products, or securities above their face value.

  • Grasp the essentials of spot and forward exchange rates and analyze their repercussions on international trade and investment.
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SH
Shontiae HudsonDec 04, 2024
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