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Question 14 Suppose that the spot GBP is: USD/GBP = 1.4570 - 1.4576 . The 6 month forward rate is: USD/GBP = 1.4428 - 1.4434

Question 14

Suppose that the spot GBP is: USD/GBP =1.4570-1.4576. The 6 month forward rate is: USD/GBP = 1.4428-1.4434. Calculate the mid-points and then determine the annualized forward discount or forward premium of the GBP relative to the USD.

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