Question
Assume that you trade forward contracts involving the United States dollar (USD) against the Australian dollar (AUD) in Australia. The forward margins on the AUD
Assume that you trade forward contracts involving the United States dollar (USD) against the Australian dollar (AUD) in Australia. The forward margins on the AUD are available in the table below. What are the forward premiums or discounts on the USD? Final answers in annual percentage terms.
| Length of forward contract | Forward margin on AUD per annum |
| 30-day contract | -18% |
| 90-day contract | -5% |
| 120-day contract | 9% |
| 180-day contract | 12% |
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Corporate Finance Principles And Practice
Authors: Denzil Watson, Tony Head
1st Edition
0273630083, 978-0273630081
