Using the following spot and forward bid-ask rates for the Philippines Peso/US Dollar (PHP/USD) exchange rate, answer the following questions:

1. What are the outright 1-months forward rates for bid and ask respectively? *

a. 48.63; 48.75

b. 47.83; 47.91

c. 48.65; 48.59

d. 47.63; 47.89

e. None of the above

2. The 3-months forward points for ask and bid respectively are equal to: *

a. 37.5; 44.5

b. 44.5; 37.5

c. 44; 37

d. 37; 44

e. None of the above

3. An American citizen would find the Peso trading at a 3-months annual forward premium/discount of: *

a. -3.358%

b. 10.075

c. 3.358%

d. -10.075%

e. None of the above

4. __________ has the smallest forward __________, while ________ has the largest forward __________. *

a. 6 months forward; discount; 1 month forward; discount

b. 1 month forward; premium; 6 months forward; premium

c. 6 months forward; premium; 1 month forward; premium

d. 1 month forward; discount; 6 months forward; discount

e. None of the above

Spot and forward PHP/USD Bid Ask Period Pips Rate Pips Rate 48.23 48.25 40 ? 34 ? Spot 1-month forward 3-months forward 6-months forward ? 47.79 ? 47.88 49 ? 40