Forward Premium on the Dollar. Calculate the forward premium on the dollar if the spot rate is $ $1\mathrm{.}6173$ equals pound $1\mathrm{.}00$ and the $3-$month forward rate is $ $1\mathrm{.}5855$ equals pound $1\mathrm{.}00.$Note: Use a$360-$day year.

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Part $1$

The forward premium on the dollar is

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$8\mathrm{.}022706\%.($Round to four decimal$$ places.$)$

Part $2$

$($Select from the$$ drop$-$down menus.$)$

The positive premium indicates that the pound is selling forward at a

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to the$$ dollar, and$$ simultaneously, the dollar is selling forward at a

$$

to the pound. That$$ is$,$ the forward rate requires fewer U$.$S$.$ dollars in exchange for pounds than the current spot rate.