Explore BrainMass
Share

Explore BrainMass

    Forward discount or premium

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Forward Premium: Compute the forward discount or Premium for the Mexican peso whose 90-day forward rate is $ .102 and spot rate is $ .10. State whether your answer is a discount or premium.
    Thank you.
    The reference textbook is International Financial Management by Jeff Madura, 10th edition.

    © BrainMass Inc. brainmass.com October 10, 2019, 1:17 am ad1c9bdddf
    https://brainmass.com/economics/international-economics/forward-discount-premium-328631

    Solution Preview

    The premium of discount is the difference between the forward rate and the spot rate. If the forward rate is higher, implying we get more $ for 1 peso this would imply a premium since we ...

    Solution Summary

    The solution explains how to calculate the forward discount or premium

    $2.19