Describe the difference between a forward rate selling at a discount and selling at a premium. If

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Describe the difference between a forward rate selling at a discount and selling at a premium. If the spot rate between the U.S. dollar and the Brazilian real is $1 = 2.0875 real and the 3-month forward rate is $1 = 2.1025 real, is the forward real selling at a discount or a premium?

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Finance Applications and Theory

ISBN: 978-0077861681

3rd edition

Authors: Marcia Cornett, Troy Adair

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