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How to calculate outright quotes for bid and ask

03/10/2021 Client: muhammad11 Deadline: 2 Day

Problem 1 The following quotes are given for CAD/EUR: 1.4530/14535, 15-10, 22-14,30-20

for the spot, one month, three months and six months forward contracts.

a) calculate the outright quotations and the spread for the spot rate and the 3-month forward contract.

b) how is the spread related to time to maturity of the forward contract?

c) determine the percentage premium/ discount of the Canadian dollar with respect to the euro for the 3 months ask rates (annualized).

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