The following quotations are given for the spot rate and the 1-month, 3-moth ad 6-month absolute swap rates involving the US$ and the Euro ():

Bid ($/)

Ask ($/)

Spot rate

1.0904

1.0910

1-month absolute swap

0.0219

0.0224

3-month absolute swap

0.0463

0.0472

6-motnh absolute swap

0.0578

0.0587

Calculate forward quotes for the US $ dollar as: a) outright forward quotes, and b) annual percentage premium or discount. Explain whether or not the forward rates can be reliable forecasts of future spot rates.