Determining forward premium and discount


Assignment:

Q1. An investor wishes to buy euros spot (at $1.3908) and sell euros forward for 180 days (at $1.3996).

a. What is the swap rate on euros?
b. What is the forward premium or discount on 180-day euros?

Q2. Suppose Credit Suisse quotes spot and 90-day forward rates on the Swiss franc of $0.7957–60, 8–13.

a. What are the outright 90-day forward rates that Credit Suisse is quoting?
b. What is the forward discount or premium associated with buying 90-day Swiss francs?
c. Compute the percentage bid-ask spreads on spot and forward Swiss francs.

Your answer must be, typed, double-spaced, Times New Roman font (size 12), one-inch margins on all sides, APA format and also include references.

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Supply Chain Management: Determining forward premium and discount
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