The Wall Street Journal reported the following spot and forward rates for the Swiss franc ($/SH).
Spot..........................$0.7642
30 day forward....... $0.7670
90 day forward....... $0.7723
180 day forward..... $0.7728
Was the Swiss franc selling at a discount or premium in the premium in the forward market?
What was the 30-day forward premium (or discount)?
What was the 90-day forward premium (or discount)?
Suppose you executed a 90-day forward contract to exchange 100,000 Swiss francs into U.S. dollars. How many dollars would you get 90 days hence?
Assume a Swiss bank entered into a 180-day forward contract with Bankers Trust to buy $100,000. How any francs will the Swiss bank deliver in six months to get the U.S. dollars?