If the forward points are _______at a specific date,the base currency is at a _______.
A) rising; forward discount
B) falling; forward discount
C) rising; forward loss
D) falling; forward gain

Question

Quizplus · Accepted Answer

Forward points are the difference between the spot exchange rate and the forward exchange rate. When the forward points are falling, it indicates that the forward exchange rate is lower than the spot exchange rate, which means that the base currency is at a forward discount. Therefore, option B is correct. Option A, C, and D are incorrect as they do not align with the relationship between forward points and the base currency.

If the Forward Points Are _______At a Specific Date,the Base