Final answer:
The forward discount of the euro is calculated by subtracting the forward rate from the spot rate, dividing by the spot rate, and then multiplying by 100%. In this case, it is approximately 4.0000%.
Step-by-step explanation:
The forward discount of the euro can be calculated by comparing the spot rate and the forward rate. The formula for calculating the forward discount or premium as a percentage is [(Spot Rate - Forward Rate) / Spot Rate] × 100%. Using the given rates of $1.4500 for the spot rate and $1.3920 for the forward rate, we have the following calculation:
[(1.4500 - 1.3920) / 1.4500] × 100% = (0.0580 / 1.4500) × 100% ≈ 4.0000%
Therefore, the answer that most closely approximates the forward discount of the euro is (a) 4.0000%.