Exchange Currency

forward premium (or discount)

Excess (or deficit) resulting from a forward delivery contract in currency trading. Formula: [(Forward rate - spot rate)/spot rate] x (360/number of days in the contract) x 100. A positive percentage value means a forward premium, and a negative percentage value means a forward discount.

Related information about forward premium (or discount):
  1. Forward exchange rate - Wikipedia, the free encyclopedia
    The following equations demonstrate how the forward premium or discount is ... For example, to calculate the 6-month forward premium or discount for the euro ...
     
  2. What is forward premium (or discount)? definition and meaning
    Definition of forward premium (or discount): Excess (or deficit) resulting from a forward delivery contract in currency trading. Formula: [(Forward rate - spot ...
     
  3. CHAPTER 5 THE FOREIGN EXCHANGE MARKET
    b. Swap Rate: quoted in the. interbank market as a discount or premium. THE FORWARD MARKET. CALCULATING THE FORWARD PREMIUM OR DISCOUNT ...
     
  4. SUGGESTED SOLUTIONS TO CHAPTER 5 PROBLEMS
    5. The spot and 90‑day forward rates for the pound are $1.1376 and $1.1350, respectively. What is the forward premium or discount on the pound? Answer.
     
  5. Discount | Premium |Foreign Exchange | Forward Rate | Spot Rate ...
    Where: N = number of months for which forward contract has been made. Example: From the data given below, let us calculate forward premium or discount, ...
     
  6. How a forward premium or discount is computed
    How a forward premium or discount is computed? In: Importing and Exporting [ Edit categories]. Answer: forward exchange rate can be computed from spot ...
     
  7. Solution: Ch-7
    Is the Swiss franc selling at a forward premium or discount? Answer. At a forward premium. e. What is the 90‑day forward discount or premium on the Swiss franc ...
     
  8. Chapter 2 – Tools of Analysis for International Trade Models
    ... constant rate, implying a constant forward premium or discount. For example, the interest rate differential between U.S. and Canada is constant at about 1.3%, ...