Question
An Australian investor wishes to hedge the currency risk for her portfolio using a forward. Currently, the $A/$US spot rate is $0.72, while the relevant
An Australian investor wishes to hedge the currency risk for her portfolio using a forward. Currently, the $A/$US spot rate is $0.72, while the relevant US interest rate is 1.1% and the corresponding Australian rate is 2.6%. What 12-month forward rate should the investor expect to be offered?
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Basic Finance An Introduction to Financial Institutions, Investments and Management
Authors: Herbert B. Mayo
11th Edition
1285425790, 1285425795, 9781305464988 , 978-1285425795
