By definition, if the spot rate is greater than the forward rate, the currency is said to be selling at a discount.
By definition, if the spot rate is greater than the forward rate, the currency is said to be selling at a discount in the forward market. This does not necessarily indicate anything about the value of the currency.
By definition, if the spot rate is greater than the forward rate, the currency is said to be selling at a discount in the forward market. This does not necessarily indicate anything about the value of the currency.
By definition, if the spot rate is greater than the forward rate, the currency is said to be selling at a discount. The 1.4925 and 1.4775 are the prices of one British pound in US dollars on the spot and forward markets. Because the price of the British pound in US dollars is lower on the forward market than on the spot market, the forward pound sterling is selling at a discount in the forward market. To determine which currency has the value of 1 unit in an exchange rate quote, we need to know the convention used in quoting exchange rates on currency exchanges. The convention is the order in which the two currencies are listed, and the currency listed first has the value of 1 unit. The order is: EUR - GBP - AUD - NZD - USD - ANY OTHER CURRENCY An exchange rate between the British pound and the US dollar is quoted as GBP/USD, with the British pound coming first. Therefore, the British pound has the value of 1 unit in this exchange rate quote.
|
