QUESTION $10$

You observe the following quotations:

Spot:

$GB\frac{P}{C}AD$

$=1\mathrm{.}5884$

$12$ Month Forward:

$GB\frac{P}{C}AD$

$=1\mathrm{.}6628$

Are GBP selling at a forward premium or a forward discount? What is the annualized forward premium or discount for GBP$?$

a$.$

GBP is selling at a Forward Premium of $4\mathrm{.}7\%$

b$.$

GBP is selling at a Forward Premium of $0\mathrm{.}47\%$

c$.$

GBP is selling at a Forward Discount of $4\mathrm{.}7\%$

$4$