Multiple Choice
If the spot exchange rate between dollars and pounds is equal to 2 dollars for one pound and the forward exchange rate equals 2.10 dollars for one pound,then
A) the dollar is trading at a forward premium.
B) the pound is trading at a forward discount.
C) the pound is trading at a forward premium.
D) the market presents an opportunity for arbitrage.
Correct Answer:
Verified
Correct Answer:
Verified
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