Question: Use the following information to answer question 5 to 7 JP Morgan quotes the following rates for the Euro Bid (/) Ask (/) Spot rate

Use the following information to answer question 5 to 7

JP Morgan quotes the following rates for the Euro

Bid (/) Ask (/)

Spot rate 133.94 133.97

1-month forward 134.31 134.42

3-month forward 134.75 134.88

6-month forward 135.26 135.56

12-month forward 135.77 136.36

What would you receive from JP Morgan if you bought 1 million at the 1-month forward rate?

a. 134,310,00

b. 7,445.462

c. 134,420,00

d. 7,439.36

What would you pay JP Morgan if you sold Yen 5 million at the 12-month forward rate?

a. 678,850,000

b. 36,826.987

c. 681,800,000

d. 36,667.644

Based on the bid quote of Euro, is the Yen selling at a 3-month forward premium or a forward discount? Calculate annualized forward premium or discount for 3-month forward quote.

a. 2.4190% forward premium

b. 0.6047% forward premium

c. -2.4109 % forward discount

d. -0.6027% forward discount

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