Question: The / $ spot exchange rate is $ 1 . 5 0 / and the 1 2 0 day forward exchange rate is 1 .

The /$ spot exchange rate is $1.50/ and the 120 day forward exchange rate is 1.45/. The forward premium (discount) is:
Group of answer choices
the dollar is trading at a 5% discount to the euro for delivery in 120 days.
the dollar is trading at an 8% premium to the euro for delivery in 120 days.
the dollar is trading at a 10% discount to the euro for delivery in 120 days.
the dollar is trading at a 5% premium to the Swiss franc for delivery in 120 days.

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