Utah Banks bid price for Canadian dollars is $.7938 and its ask price is $.81. What is the bid/ask percentage spread?

2. Compute the forward discount or premium for the Mexican peso whose 90-day forward rate is $.102

and spot rate is $.10. State whether your answer is a discount or premium. (Hint: (F - S) / S)

3. Randy Rudecki purchased a call option on British pounds for $.02 per unit. The strike price was $1.45 and the spot rate at the time the option was exercised was $1.46. Assume there are 31,250 units in a British pound option. What was Randys net profit on this option?

4. Assume the following information:

Quoted Price

Spot rate of Canadian dollar $.80

90day forward rate of Canadian dollar $.79

90day Canadian interest rate 4%

90day U.S. interest rate 2.5%

Given this information, what would be the yield (percentage return) to a U.S. investor who used covered interest arbitrage? (Assume the investor invests $1,000,000.00).