The following are the quoted rates against the USD:
Quoted
180-day
Forward
Spot rate
rate
GBP/USD =
1.3000
1.3083
USD/EUR =
0.8585
0.8495
(Note: GBP/USD means one GBP expressed in terms of USD)
REQUIRED:
a. Compute the GBP/EUR cross rate for the spot and 180-day forward rates
b. Compute the annualized percentage premium or discount for the following:
i. GBP over USD
ii. EUR over USD
iii. USD over GBP
iv. USD over EUR
v. EUR over GBP
vi. GBP over EUR
(eg. for GBP over USD, is GBP a premium or discount over the USD?}