Question: Given the spot and a 6-month forward bid-ask spread for UK and Swiss Franc as below, Forward Rate Spot Rate 1) % spread Swap quotation

Given the spot and a6-month forwardbid-ask spread for UK and Swiss Franc as below,

Forward Rate Spot Rate 1) % spread Swap quotation 2) Outright quotation3) % spread

:$1.5910-15 43-40(disc, prem)

CHF: $0.9210-17 64-68(disc, prem)

1) Compute the spot percent spread for and CHF. Which one shows a larger and why?

:CHF:

2) Indicate if the two currencies are forward premium or discount. Calculate the outright quotation for and CHF.

:CHF:

3) Compute the forward percent spread for and CHF. Which one shows a larger and why?

:CHF:

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