Referring to the following spot and forward bid-ask rates for the US$/€ exchange rate, answer the questions that follow:

a. Is the euro at a premium or discount vis-à-vis the U.S. dollar?

b. What is the annualized forward premium or discount for each maturity?

c. Restate the bid-ask quotations as a euro price of one dollar. Is the dollar at a premium or discount vis-à-vis the euro? What is the annualized premium/
discount for each maturity? Are they different from the results you obtained in part b? Why?

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Maturity S/ Bid Rate S/ Ask Rate Spot 1.2389 1.2401 1 month 1.2396 1.2408 3 months 1.2403 1.2415 6 months 1.2407 1.2418 12 months 1.2408 1.2420