Question
Dollar/Euro Forwards. Use the following spot and forward bid-ask rates for the U.S. dollar/euro (US$/euro) from December 10, 2010, to answer the following questions: a.
Dollar/Euro Forwards. Use the following spot and forward bid-ask rates for the U.S. dollar/euro
(US$/euro)
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?
Period | Bid Rate | Ask Rate |
spot | 1.32311.3231 | 1.32321.3232 |
1 month | 1.32301.3230 | 1.32311.3231 |
2 months | 1.32281.3228 | 1.32291.3229 |
3 months | 1.32241.3224 | 1.32271.3227 |
6 months | 1.32151.3215 | 1.32181.3218 |
12 months | 1.31941.3194 | 1.31981.3198 |
24 months | 1.31471.3147 | 1.31761.3176 |
Days Bid Rate Ask Rate Forward Period Forward USSIE US$/ Premium Spot 1.3231 1.3232 1 month 30 1.3230 1.3231
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