Use the exchange rates from the Table below to answer the questions that follow.

Table: Exchange Rates in late New York trading. April 3, 2019

Country/Currency	In US$	Per US$
Australian dollar (A$) 1-month forward 3-month forward 6-month forward	0.7113 0.7117 0.7125 0.7139	1.4060 1.4051 1.4035 1.4008
Swiss franc (SF) 1-month forward 3-month forward 6-month forward	1.0018 1.0047 1.0104 1.0193	0.9982 0.9953 0.9897 0.981

Write down (using the information in the Table above) the American quotes for the A$ and the SF in the spot and the 1-, 3-, 6- month forward markets. Indicate the rates with labels using the symbols and use the 4 decimal format.

A$ SF

SPOT

1-month Forward

3-month Forward

6-month Forward

Calculate the spot, one-month, three-month, & six-month forward cross exchange rates between the Australian dollar (A$) and the Swiss franc (SF). State the 4 cross rates in Australian terms, i.e., the Australian dollar price of one Swiss franc. (Use the appropriate symbols and approximate to 4 decimals.)

Cross-Rate between the Australian dollar and the Swiss franc:

SPOT

1-month Forward

3-month Forward

6-month Forward

Calculate the forward premiums or the forward discounts for the Swiss franc in points for one month, three months, and six months. Show your calculations.

One-month Premium/Discount :

Three-month Premium/Discount :

Six-month Premium/Discount :

Identify the trend in the forward premiums/discounts from one-month to three-months to six-months and explain why the forward premiums follow the trend?