Forward discount or premium
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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.
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Solution Summary
The solution explains how to calculate the forward discount or premium
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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 ...
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