Forward premiums on the Swiss franc/pound (SFr/GBP)
The following spot and forward bid-ask rates for the Swiss franc/British pound (SFr/GBP) exchange rate is available. Use these rates to answer questions below.
																			a)		b)
								Calculated		Forward
Period		Days Forward		Bid Rate		Ask Rate		Mid-Rate		Premium
spot				1.19040		1.19140
1 month		30		1.19294		1.19560
2 months		60		1.19450		1.19294
3 months		90		1.20006		1.19450
6 months		180		1.21153		1.20006
12 months		360		1.21153		1.21153
24 months		720		1.23358		1.23358
a) Calculate the mid-rates from the bid-ask rate quotes.
b) Calculate the forward premium on the different maturities using the mid-rates from part a).
c) Which maturities have the smallest and largest forward premiums?