Question
14Because it is unlikely she will be able to visit you this year, your wealthy American aunt wants to send you a present for your
14Because it is unlikely she will be able to visit you this year, your wealthy American aunt wants to send you a present for your birthday. You expect she will give you USD 8453 in 4 months. Having taken this course, you know you can lock in the AUD rate for this USD receivable using a money market hedge. If (annualized) 4-month interest rates in the US are 6.9%-6.8%, 4-month interest rates in Australia are 3.9%-3.7%, and the current spot rate is 2.1 AUD/USD, what is the locked in AUD value of this present? a. 17938.3404 b. 17566.2099 c. 17926.5349 d. 4067.6509 e. 8364.8618
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