Question: Using the information below to calculate the three-, and six-month forward premium or discount for US Dollar versus the British Pound using European term quotations.

Using the information below to calculate the three-, and six-month forward premium or discount for US Dollar versus the British Pound using European term quotations. Assume each month has 30 days.

UK Pound in US$ per US$

Spot 1.1405 .8768

1-mos forward 1.1402 .8770

3-mos forward 1.1396 .8775

6-mos forward 1.1389 .8780

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