Assume the quotes indicated below are from a dealer in the NY currency market.

Forward prices are quoted as the absolute forward premium or discount (not percentage) in basis points (one basis point = .0001).

Part 1. Forward exchange rates

1a. If the dealers spot market quotes for the British pound () are 1.3195 1.3200, and the dealers 6-month forward quotes for the euro are: -20 -12, what are the dealers effective 6-month forward bid and ask prices for the pound?

b. If a customer were to enter a 6-month forward contract with this dealer to sell $1m to obtain British pounds, how many pounds would the customer receive in six months?

2a. If the dealers spot market quotes for the New Zealand dollar (NZ$) are: 0.6838 0.6839, and the dealers 1-year forward quotes for the New Zealand dollar are: 43 47, what are the dealers effective 1-year forward bid and ask prices for the New Zealand dollar?

b. If a customer were to enter a 1-year forward contract with this dealer to sell NZ$1m to obtain US dollars, how many US dollars would the customer receive in one year?