If the British pound is selling at a premium relative to the euro in t
If the British pound is selling at a premium relative to the euro in the forward market, is the forward price of EUR/₤ larger or smaller than the spot price of EUR/₤?
What will be an ideal response?
ANSWER
Answer: When the pound is selling at a premium in the forward market, the euro price of the pound in the forward market, EUR/₤, would be larger than the spot price of EUR/₤.
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