United states dollar and eur

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In this problem, "USD" refers to the United States dollar and "EUR" refers to the euro. The current spot rate is USD1.3/EUR. The six-month forward rate is USD1.2/EUR. The USD:

a.) Will definitely appreciate over the next six months

b.) Is selling at a forward premium

c.) Is selling at a forward discount

Reference no: EM133112101

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