the drop. down menu is PREMIUM OR DISCOUNT

Direct Forward Discount on the Dollar. Calculate the forward discount on the dollar (the dollar is the home currency) if the spot rate is $1.5537 / and the 3-month forward rate is $1.5255/ . Note: Use a 360-day year. The forward premium on the dollar is %. (Round to four decimal places.) (Select from the drop-down menus.) to the The negative premium indicates that the pound is selling forward at a to the dollar, and simultaneously, the dollar is selling forward at a pound. That is, the forward rate requires fewer U.S. dollars in exchange for pounds than the current spot rate