Question: S 0 C$ $ is quoted as C$ 1 . 2 3 4 0 $ Bid and C$ 1 . 2 3 5 0 $

0

$ is quoted as

1.2340

$ Bid and C$

1.2350

$ Ask.

The six

-

month forward rate F

1

$ is quoted as

1.2382

$ Bid and C$

1.2397

$ Ask.

Assume you reside in the United States. Calculate forward quotes for the Cana

-

dian dollar as an annual percentage premium or discount. Would a trader in Canada get a different answer if asked to calculate the annual percentage pre

-

mium or discount on the U

.

.

dollar? Why?

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