Answer to Question #69755 in Financial Math for Dom

Question #69755
You are in America. Interest rates are currently 5.25% in Australia, and are 2.7% in the US. If
the current exchange rate allows you to trade $US1 for $A1.3, what is a fair forward price to buy
$A1000 in two years time? Explain how you would trade if the two year forward price for $A1000
was $US700
0
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