Answer (A) is correct . The pound costs more on the forward market than it does on the spot market, indicating an anticipated gain in purchasing power (resulting in a forward premium).
Answer (B) is incorrect because The price is quoted at a discount if the spot rate is higher than the forward rate.
Answer (C) is incorrect because Undervaluation refers to comparisons of currencies.
Answer (D) is incorrect because Overvaluation refers to comparisons of currencies.
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