1. A method of deriving at least one motion vector of a bi-predictive block based on a list 1 motion vector of a co-located block in a reference picture, performed by a moving picture coding system, comprising: selecting, by the moving picture coding system, the list 1 motion vector of the co-located block in a first reference picture as the motion vector for deriving the at least one motion vector of the bi-predictive block, if the co-located block only has the list 1 motion vector, the first reference picture being a type of reference picture permitted to be located temporally before or after a current picture, the current picture including the bi-predictive block; scaling, by the moving picture coding system, the selected list 1 motion vector based on temporal distance between the current picture and a second reference picture referred by the co-located block; and deriving, by the moving picture coding system, the at least one motion vector of the bi-predictive block by applying a bit operation to the scaled list 1 motion vector.