1. Because it is unlikely she will be able to visit you this year, your wealthy Canadian aunt wants to send you a present for your birthday. You expect she will give you CAD 14269 in 10 months. Having taken this course, you know you can lock in the AUD rate for this CAD receivable using a money market hedge. If (annualized) 10-month interest rates in Canada are 9.7%-9.6%, 10-month interest rates in Australia are 4.1%-3.9%, and the current spot rate is 2.7 AUD/CAD, what is the locked in AUD value of this present? Select one

a. 40329.7910

b. 36803.4585

c. 40676.9500

d. 5532.2073

e. 13630.9106

2.

Because it is unlikely she will be able to visit you this year, your wealthy Canadian aunt wants to send you a present for your birthday. You expect she will give you CAD 6084 in 5 months.

Having taken this course, you know you can lock in the AUD rate for this CAD receivable using a money market hedge. If (annualized) 5-month interest rates in the Canada are 6.6%, 5-month interest rates in Australia are 3.1%, and the current spot rate is 2.8 AUD/CAD, what implied AUD/CAD exchange rate can you lock in?

Select the closest answer.

Select one:

a. 2.8403

b. 2.7603

c. 2.8951

d. 0.3623

e. 17280.46