Since the exchange rate quotes are indirect quotes on the dollar (*/$), the proper forward premium calculation is: Forward premium = ( Spot - Forward ) / (Forward) x (360 / days) a. b. Y/$ Y/$ Calculated Forward Period Days Forward Bid Rate Ask Rate Mid-Rate Premium spot 85.41 85.46 85.43500 1 month 30 85.02 85.05 85.03500 2 months 60 84.86 84.90 84.88000 3.9232% 3 months 90 84.37 84.42 84.39500 4.9292% 6 months 180 83.17 83.20 83.18500 5.4096% 12 months 360 82.87 82.91 82.89000 3.0703% 24 months 720 81.79 81.82 81.80500 2.2187%