The Canadian-U.S. spot rate S0C$/$ is quoted as ‘‘C$1.2340/$

| June 9, 2016

Question
The Canadian-U.S. spot rate S0C$/$ is quoted as ‘‘C$1.2340/$ Bid and C$1.2350/$ Ak.’’ The 6-month forward rate F1C$/$ is quoted as ‘‘C$1.2382/$ Bid and C$1.2397/$ Ask.’’
Assume you reside in the United States. Calculate forward quotes for the Canadian dollar as an annual percentage premium or discount. Would a FX trader in Canada get a different answer if asked to calculate the annual percentage premium or discount on the U.S. dollar for each forward rate? Why?

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