Suppose That What Is the Annualized Percentage Discount or Premium of the

Suppose that: $$\begin{array}{l}\begin{array} {lll } \text {U.K. (pound) }&\frac { \text { Spot Rate } } { 1.5331 }&\frac { 3 \text { Month Forward Rate } } { 1.5372 }&\frac { 1 \text { Year Forward Rate } } { 1.5502 }\end{array}\end{array}$$ What is the annualized percentage discount or premium of the U.K.pound on the U.S.Dollar?

A) 1.10% premium
B) 1.10% discount
C) 2.20% premium
D) 2.20% discount

Correct Answer:

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