Assume that the US dollar is selling in the spot market for AUD1.44. Simultaneously, in the 3-month forward market the US dollar is selling for AUD1.37. Which one of the following statements correctly describes this situation?

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

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

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

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

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