Does anyone know if there is a difference with regards to the treatment of valuing currency forwards in the Econs section vs the Derivatives section?
Thanks I was orginally curious as for the currency forward
- premium when forward > spot
- discount when forward < spot
This led me to think that the valuation formula is (forward - spot), unlike for derivatives which is (spot - forward).
Can someone just verify the case that the above relates to premium and discounts which is different from valuation?
One uses effective rates, the other nominal rates.
Sorry which uses effective and which uses nominal?
Econ uses nominal rates; derivatives uses effective rates.
Eson also includes the contract size in the formula; derivatives does not.