find outright rate

find spot rate

C. Forward Rate Quotations 1. Two methods Maturity Spot 1-month 3-month 6-month Bid 2.0015 1.9996 1.9989 1.9973 Ask 2.0030 2.0013 2.0008 1.9995 Spread .0015 .0017 .0019 .0022 Spread% .075 .085 .095 .110 a. Outright Rate: Quoted to commercial customers Note: When the forward bid in points exceeds the ask in points, the forward rate is at a discount and the points must be subtracted from the spot price to get the outright quotes, Conversely, if the forward bid in points is smaller than the ask rate in points, the forward rate is at a premium and the points should be added to the spot price to compute the outright quote. b. Swap Rate: Quoted in the interbank market as a discount from, or premium on the spot rate. A swap rate can be converted into outright rate by adding the premium to - or subtracting the discount from, the spot rate. Although the swap rates do not carry signs, but it can be determined in a fashion. Example: Suppose that the following quotes are received for spot, one, three, and six month pound sterling (): 2.0015-30 19-17 26-22 42-35 Find the outright rates