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Assume the following spot and forward rates for the Australian dollar to US Dollar (AUD/$). Spot rate 30-day forward rate 90-day forward rate 120-day forward
Assume the following spot and forward rates for the Australian dollar to US Dollar (AUD/$). Spot rate 30-day forward rate 90-day forward rate 120-day forward rate $0.8587 :$0.8635 :$0.8694 :$0.8717 If you have issued a 90-day forward contract to exchange 77,000 Australian dollars into U.S. dollars, calculate how many U.S. dollars are involved. (2 marks) (b) Compute the 30-day forward premium; (4 marks) Compute the 120-day forward premium; (4 marks) (d) Critically discuss the differences between a forward contract and a futures contract. (10 marks)
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