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Problem 1. Forward Premiums on the Dollar/Euro ($/) Use the following spot and forward bid-ask rates for the U.S. dollar/euro (US$/ ) exchange rate from
Problem 1. Forward Premiums on the Dollar/Euro ($/) Use the following spot and forward bid-ask rates for the U.S. dollar/euro (US\$/ ) exchange rate 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
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