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Assume that the Euro is selling in the spot market for $1.10. Simultaneously, in the 3-month forward market the Euro is selling for $1.12. Which

Assume that the Euro is selling in the spot market for $1.10. Simultaneously, in the 3-month forward market the Euro is selling for $1.12. Which one of the following statements correctly describes this situation? The spot market is out of equilibrium.

The forward market is out of equilibrium.

The dollar is selling at a premium relative to the euro.

The Euro is selling at a premium relative to the dollar.

None of the other four statements correctly describes this situation.

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