Assume that the Euro is selling in the spot market for $1.24. Simultaneously, in the 3-month forward market the Euro is selling for $1.28. Which one of the following statements correctly describes this situation?

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

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

III. The dollar is selling at a discount relative to the euro.

IV. The euro is selling at a discount relative to the dollar.

		I and II only
		I and III only
		II and IV only
		III and IV only
		I and IV only