Calculate the forward discount or premium if the spot rate is $2.00/£1 and the three-month forward rate is $2.01/£1.

A) The pound is at a forward premium of 2% per year with respect to the dollar.

B) The pound is at a forward discount of 2% per year with respect to the dollar.

C) The dollar is at a forward premium of 2% per year with respect to the pound.

D) The dollar is at a forward discount of 0.5% per year with respect to the pound.

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