Seeing is believing!
Before you order, simply sign up for a free user account and in seconds you'll be experiencing the best in CFA exam preparation.
Basic Question 4 of 14
A ______ exists when the ______ is higher than the spot rate.
B. discount; futures rate
C. premium; forward rate
A. discount; forward rate
B. discount; futures rate
C. premium; forward rate
User Contributed Comments 3
| User | Comment |
|---|---|
| Shaan23 | The dollar would quote at a premium but the chinese would be at a discount. |
| maryprz14 | 6.3100 - 6.2935 = 0.0156? |
| myron | check your math @maryprz14: it is 0.0165. |
Thanks again for your wonderful site ... it definitely made the difference.
Craig Baugh
Learning Outcome Statements
explain the arbitrage relationship between spot and forward exchange rates and interest rates, calculate a forward rate using points or in percentage terms, and interpret a forward discount or premium
CFA® 2025 Level I Curriculum, Volume 1, Module 8.