(Determining the percent-per-annum premium or discount) (Related to Checkpoint 19.1 on page 643 and Checkpoint 19.2 on page 646) The spot and forward rates for the British pound against the U.S. dollar has been quoted as follows:

Calculate the one-, three-, and six-month forward premium or discount for the British pound versus the U.S. dollar. For your calculation, assume each month has 30 days.
How can you interpret your results?

Transcribed Image Text:

Spot 1.2234 One-Month 1.2125 Three-Month 1.1668 Six-Month 1.1124