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1. The current exchange rate between Canadian dollar (CAD) and Australian dollar (AUD) is 0.89CAD/AUD. The CAD interest rate is 2.85% and AUD interest rate

1.The current exchange rate between Canadian dollar (CAD) and Australian dollar (AUD) is 0.89CAD/AUD. The CAD interest rate is 2.85% and AUD interest rate is 1.50%. Assume these interest rates are continuously compounded. What is the 1.5-yr forward price of AUD?

A.0.9009 CAD

B.0.9074 CAD

C.0.9082 CAD

D.0.9109 CAD

E.0.9112 CAD

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