Excess (or deficit) resulting from a forward delivery contract in currency trading. Formula: [(Forward rate - spot rate)/spot rate] x (360/number of days in the contract) x 100. A positive percentage value means a forward premium, and a negative percentage value means a forward discount.
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The following equations demonstrate how the forward premium or discount is ... For example, to calculate the 6-month forward premium or discount for the euro ...
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Definition of forward premium (or discount): Excess (or deficit) resulting from a forward delivery contract in currency trading. Formula: [(Forward rate - spot ...
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Where: N = number of months for which forward contract has been made. Example: From the data given below, let us calculate forward premium or discount, ...
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