alculate the monthly interest rate differences and estimate the AUD/USD exchange rate for each month from November 2017 through September 2018

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Calculate the monthly interest rate
differences and estimate the AUD/USD
exchange rate for each month from
November 2017 through September 2018
using the interest parity model. Display the
following results in a single table with
workings: ii. the forecasted monthly
exchange rates based on the interest parity
model;
Exchange rate (USD per AUD) AUD 1 year zero rate (%, p.a.) USD 1 year zero rate (%, p.a.)
01-Oct-2017
0.769764
1.6200
1.3349
01-Nov-2017
0.756659
1.5600
1.4469
01-Dec-2017
0.780823
1.5600
1.6189
01-Jan-2018
0.81011
1.6100
1.7618
01-Feb-2018
0.779362
1.6000
1.9247
01-Mar-2018
0.767813
1.5800
2.0319
01-Apr-2018
0.757518
1.5800
2.0968
01-May-2018
0.757117
1.5700
2.2771
01-Jun-2018
0.734646
1.5500
2.2867
01-Jul-2018
0.74073
1.5400
2.3565
01-Aug-2018
0.726164
1.5600
2.4574
01-Sep-2018
0.722543
1.5400
2.4866
01-Oct-2018
0.709925
1.5600
2.6196
Transcribed Image Text:Calculate the monthly interest rate differences and estimate the AUD/USD exchange rate for each month from November 2017 through September 2018 using the interest parity model. Display the following results in a single table with workings: ii. the forecasted monthly exchange rates based on the interest parity model; Exchange rate (USD per AUD) AUD 1 year zero rate (%, p.a.) USD 1 year zero rate (%, p.a.) 01-Oct-2017 0.769764 1.6200 1.3349 01-Nov-2017 0.756659 1.5600 1.4469 01-Dec-2017 0.780823 1.5600 1.6189 01-Jan-2018 0.81011 1.6100 1.7618 01-Feb-2018 0.779362 1.6000 1.9247 01-Mar-2018 0.767813 1.5800 2.0319 01-Apr-2018 0.757518 1.5800 2.0968 01-May-2018 0.757117 1.5700 2.2771 01-Jun-2018 0.734646 1.5500 2.2867 01-Jul-2018 0.74073 1.5400 2.3565 01-Aug-2018 0.726164 1.5600 2.4574 01-Sep-2018 0.722543 1.5400 2.4866 01-Oct-2018 0.709925 1.5600 2.6196
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