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
Related questions
Question
29) Suppose that the two-year interest rates in Australia and the United States are 4.6% and 0.4% per annum, respectively, and the spot exchange rate between the Australian dollar (AUD) and the US dollar (USD) is 1.0500 USD per one unit of AUD. What is the theoretical forward exchange rate from the perspective of an Australian investor wanting to purchase USD in two years' time?
A. 1.0134 AUD per USD.
B. 1.0258 AUD per USD.
C. 1.0234 AUD per USD..
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