Explanation

To enter into a long 6-month forward contract, we need to find the 6-month forward ask price. The calculation involves two steps:

Step 1: Calculate the spot ask price

• We know the 1-month forward ask is USD 1.2208 per EUR 1
• 1-month points are 6.0 (which equals 0.0006 in decimal)
• Spot ask = 1-month forward ask - 1-month points
• Spot ask = 1.2208 - 0.0006 = 1.2202

Step 2: Calculate the 6-month forward ask price

• 6-month points are 45.0 (which equals 0.0045 in decimal)
• 6-month forward ask = Spot ask + 6-month points
• 6-month forward ask = 1.2202 + 0.0045 = 1.2247

Why other options are incorrect:

• A (USD 1.2155): This is the 6-month forward bid price (spot bid - 6-month points = 1.2200 - 0.0045)
• B (USD 1.2245): This incorrectly uses spot bid instead of spot ask (spot bid + 6-month points = 1.2200 + 0.0045)
• D (USD 1.2253): This incorrectly uses 1-month forward ask instead of spot ask (1.2208 + 0.0045 = 1.2253)

The key insight is that for a long forward position, we need the ask price, and we must derive the spot ask from the available forward data before calculating the 6-month forward ask.