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
Problem 1PS
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Transcribed Image Text:The spot exchange rate between Australia and New
Zealand is AUD 1.00 = NZD 1.1. Interest rates in
Australia and New Zealand are 4% and 7% per annum
respectively. Calculate the fair forward price for delivery
of one AUD in 8 months time. Your answer will be
expressed in terms of NZD. Give an answer to 4
decimal places. Answer:
The spot exchange rate between Australia and New Zealand is AUD 1.00 NZD 1.1. Interest rates in Australia and New Zealand are 4% and 7% per annum respectively.
Calculate the fair forward price for delivery of one AUD in 8 months time.
Your answer will be expressed in terms of NZD. Give an answer to 4 decimal places.
Answer:
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