1.
 EUR/USD (EUR = base currency)
 (USD = quote currency)
 
 American term: XYZ/USD
 European term: USD/XYZ
 
  Direct quote: base currency 
  = foreign currency. 
  Indirect quote: base currency
  = home currency
 
if swicth USD/JPY to JPY/USD, 
buy at 1/ask price


2.

points forward = (forward 
rate - spot rate) / 0.0001 

a.Calculate the forward rates
for all maturities ?

Forward exchange rates =
(Spot + Forward rate*0.0001)

b.What is the annual forward 
premium/discount for 
each maturity?

Forward premium/discount=( 
  Forward rate−Spot rate / 
  spot rate) * (12/Number of 
  months in the contract) ×100

AUD/USD
if forward is negative = AUD is
trading in forward discount
USD trading in forward premi

if forward is positive = AUD is
trading in forward premium
USD trading in forward discount

c.If you want to buy €10 
million for delivery in 3
months, what is the amount
of £ paid?  EUR/GBP

buy = bid rate of
forward exchange rate *
10 million

NO INVERSE (if sell = ask)
NO 1/price! IN ANY CASES!

If you want to sell £10 
million for delivery in 
1 month, what is the amount
of euros received?

Sell = Ask price of 1 month
forward exchange rate * 10
million