Question
Bid/Ask on Dollar/Euro Forwards. Use the following spot and forward bid-ask rates for the U.S. dollar/euro (US$/) from December 10, 2010, to answer the following
Bid/Ask on Dollar/Euro Forwards. Use the following spot and forward bid-ask rates for the U.S. dollar/euro
(US$/) 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?
(Click on the icon to import the table into a spreadsheet.)
| Period | Bid Rate | Ask Rate |
|
| spot | 1.3246 | 1.3247 | |
| 1 month | 1.3244 | 1.3245 | |
| 2 months | 1.3241 | 1.3242 | |
| 3 months | 1.3238 | 1.3241 | |
| 6 months | 1.3230 | 1.3232 | |
| 12 months | 1.3208 | 1.3213 | |
| 24 months | 1.3159 | 1.3188 |
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