12 Hedging On January 1st, the risk-free interest rates in Australia and the US are as follows: Australia US 1% 3% The spot exchange rate is 0.667, read as USD per AUD, or the USD price of one AUD (USD means a US dollar and AUD means an Australian dollar). a) What is the forward rate for a contract that matures on December 30th? (Answer with three decimals.) 0.020 (0,671 -0,689) b) On Jan 1st US-based treasurer enters a short forward contract on AUD 1 000 000 that matures on December 30th. What is the payoff on the forward contract if the USD/AUD exchange rate on December 30th is 0.7? -330000 (-19550-19450) c) Assume that the US company expects to receive AUD 1 000 000 on December 30th. If the treasurer hedges 50% of the exposure (a hedge ratio of 50%), what is the net (effective) exchange rate obtained by the company? (Answer with three decimals.) (0,685 0,695)