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.
The reference textbook is International Financial Management by Jeff Madura, 10th edition.
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 ...
The solution explains how to calculate the forward discount or premium