Use the following spot and forward bid-ask rates for the Japanese yen/U.S. dollar (/$) exchange rate from September 16, 2010, to answer the following questions:

a. What is the annual forward premium on the yen for all maturities? (Assume that the U.S. dollar is the home currency. Also use the Mid-Rate values computed in part a.)

b. Which maturities have the smallest and largest forward premiums?

Period	/$ Bid Rate	/$ Ask Rate
spot	85.99	86.03
1 month	85.61	85.66
2 months	85.5	85.55
3 months	84.97	85.01
6 months	83.79	83.82
12 months	83.52	83.56
24 months	82.43	82.47
Period	Forward	/$	/$	Premium
Spot	0	85.99	86.03
1 month	30	85.61	85.66		%
2 months	60	85.5	85.55
3 months	90	84.97	85.01
6 months	180	83.79	83.82
12 months	360	83.52	83.56
24 months	720	82.43	82.47