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4. Assume the following information: Quoted Price Spot rate of Australian dollar 180 day forward rate of Australian dollar 180-day Australian interest rate (a periodic
4. Assume the following information: Quoted Price Spot rate of Australian dollar 180 day forward rate of Australian dollar 180-day Australian interest rate (a periodic rate) 180-day U.S. interest rate (a periodic rate) USD.8575/AUD USD.8610/AUD 1.05% 1.25% A. Given this information, who has a covered interest arbitrage opportunity? Answer either "Australian investors" or U.S. investors". B. What changes in the 4 quoted prices above would likely occur to eliminate any further possibilities of covered interest arbitrage? ( answer with just ! or ) Spot rate of Australian dollar 180-day forward rate of Australian dollar 180-day Australian interest rate (a periodic rate) 180-day U.S. interest rate (a periodic rate)
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