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Suppose the one-year forward $1€ exchange rate is $1.7 per euro and the spot exchange rate is $1.8 per euro. What is the forw

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Answer #1

Forward premium on euros = (forward exchange rate - spot exchange rate)*100/spot exchange rate

= (1.7 -1.8)*100/1.8

= -5.6%

Therefore the forward premium on Euro is -5.6%.

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