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5.9 Dollar/Euro Forwards. Use the following spot and forward bid-ask rates for the U.S. dollar/euro (US$/E) from December 10, 2010, to answer the following questions:

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5.9 Dollar/Euro Forwards. Use the following spot and forward bid-ask rates for the U.S. dollar/euro (US$/E) from December 10, 2010, to answer the following questions: a. What is the mid-rate for each maturity? b. What is the annual forward premium for all maturities? c. Which maturities have the smallest and largest forward premiums? Bid Rate Ask Rate Pg. 150 Period spot 1.3231 1.3232 1 month 1.3230 1.3231 2 monthss 1.3228 1.3229 3 months 1.3224 1.3227 1.3218 1.3198 1.3176 6 months 1.3215 12 months 1.3194 24 months 1.3147 5.9 Dollar/Euro Forwards. Use the following spot and forward bid-ask rates for the U.S. dollar/euro (US$/E) from December 10, 2010, to answer the following questions: a. What is the mid-rate for each maturity? b. What is the annual forward premium for all maturities? c. Which maturities have the smallest and largest forward premiums? Bid Rate Ask Rate Pg. 150 Period spot 1.3231 1.3232 1 month 1.3230 1.3231 2 monthss 1.3228 1.3229 3 months 1.3224 1.3227 1.3218 1.3198 1.3176 6 months 1.3215 12 months 1.3194 24 months 1.3147

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