MBA (General)IV – Semester, International Business Unit 1
Definition of Major Currencies Quoted in the Forward Market
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The major currencies quoted on the forward market are given below. They are generally in terms of the US dollar.
Major Currencies Quoted in the Forward Market
The major currencies quoted
on the forward market are given below.
They are generally in terms of the US dollar.
Generally,
currencies are quoted in terms of 1 month, 3 months and one year forward. But enterprises may obtain from banks quotations for different periods.
Premium or Discount. Premium
or discount of a currency
in the forward market on the spot rate (SR) is calculated as following:
Premium or discount (per cent) = [(Fwd rate – Spot rate)/Spot rate] x (12/n) x 100* When n is the number of months
forward.
If, FR > SR, it implies premium.
<SR, it signals discount.
Tags : MBA (General)IV – Semester, International Business Unit 1
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