Question: Exercise 2 Let EUSD/GBP = 2.00, which is the current spot rate. Let F360 = 2.20, which is the forward rate quoted today but effective

Exercise 2 Let EUSD/GBP = 2.00, which is the current spot

Exercise 2 Let EUSD/GBP = 2.00, which is the current spot rate. Let F360 = 2.20, which is the forward rate quoted today but effective one year from today. a) Calculate the yearly forward premium/discount in percentage terms. b) In words, what are banks expecting to happen to the value of the British pound? Appre- ciate? Depreciate? c) Now show the same calculations for EGBP/USD and its corresponding F360. d) In words, whare the banks expecting to happen to the value of the USD

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