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Q-6: Use the following spot and forward bid-ask rates for the U.S. dollar/euro (USS/) exchange rate from December 10, 2010, to answer the following questions:

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Q-6: Use the following spot and forward bid-ask rates for the U.S. dollar/euro (USS/) exchange rate from December 10, 2010, to answer the following questions: Period spot 1 month 2 months 3 months 6 months 12 months 24 months USS/ Bid Rate 1.3231 1.3230 1.3228 1.3224 1.3215 1.3194 1.3147 US$/ Ask Rate 1.3232 1.3231 1.3229 1.3227 1.3218 1.3198 1.3176 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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