The Six-Month Forward Quote for German Mark Is DM1

The six-month forward quote for German mark is DM1.6/US$, and the spot price of German mark is DM1.7/US$.Which of the following statements is true?

A) Forward discount on German mark is 6.25%
B) Forward premium on German mark is 6.25%
C) Forward discount on US$ is 6.25%
D) Forward premium on US$ is 6.25% forward premium =

Correct Answer:

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