Question
Use the following spot and forward bid-ask rates for the U.S. dollar/euro (US$/euro) from December 10, 2010, to answer the following questions: a. What is
Use the following spot and forward bid-ask rates for the U.S. dollar/euro (US$/euro) from December 10, 2010, to answer the following questions:
a. What is the annual forward premium for all maturities?
b. Which maturities have the smallest and largest forward premiums?
| Period | Days Forward | Bid Rate | Ask Rate | Forward premium |
| spot | 0 | 1.3188 | 1.3189 | |
| 1 month | 30 | 1.3186 | 1.3187 | % |
| 2 months | 60 | 1.3185 | 1.3186 | % |
| 3 months | 90 | 1.3181 | 1.3183 | % |
| 6 months | 180 | 1.3173 | 1.3176 | % |
| 12 months | 360 | 1.315 | 1.3154 | % |
| 24 months | 720 | 1.3103 | 1.3135 | % |
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Financial Management For Technology Start Ups
Authors: Alnoor Bhimani
2nd Edition
1398603082, 978-1398603080
