If the forward (direct quote) exchange rate is lower than the spot rate, the forward currency is said to be trading at a:

A) premium.
B) gain.
C) discount.
D) loss.

Forward Exchange Rate

The agreed-upon exchange rate for currencies to be swapped on a specified future date.

Spot Rate

The current market price at which a particular asset, such as currency or commodity, can be bought or sold for immediate delivery.

Discount

A reduction applied to the regular price of goods or services or the amount by which the present value of future cash flows is reduced for discounting purposes.