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What is the forward premium-euro and dollar

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The U.S. Dollar/Euro exchange rate is $1.80 = €1.00. Consider a trader who takes a long position in a six-month forward contract on the euro. The forward rate is $1.75 = €1.00; the contract size is €62,500. At the maturity of the contract the spot exchange rate is $1.65 = €1.00.

A) What is the forward premium (discount) at which the euro was trading against the U.S. dollar?

B) What has the trader made or lost at the maturity of the contract?

Reference no: EM132689043

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