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What is the premium or discount

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Reference no: EM132908753

A foreign exchange trader gives the following quotes for the MYR spot, one-month, three- month and six-month to a Malaysian based Chief Financial Officer (CFO).

$0.2201/MYR- $0.2206/MYR
Forward Point
1 month 4/6
3 month 9/8

Problem a. Calculate the outright quotes for 1-month and 3-month forward respectively

Problem b. If the CFO wishes to sell MYR100,000 at 3 month forward, what is the premium or discount, for three - month forward in annual percentage terms? Please state clearly whether the foreign currency is trading at a forward premium or discount?

Reference no: EM132908753

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