I need help with question d in the 2ed pic: For each period of 2000Q4 and 2017Q4, calculate the carry trade strategy returns. There are some information in the first pic if you need it.

I am not very understand it and need a formula to calculate the carry trade gain/loss. (if it it very complicated, pls give an example) thx

Part A (10 marks): Excel Calculations You first need to download the quarterly data of Australia and U.S. from Internet for the period between 2000Q4 and 2017Q4. In order to provide the below analysis, you need to have interest rate, exchange rate, inflation rate and forward rate data for both countries. Hint: Data Download from Internet Interest Rate Australia US Using (mid yield) data- Australia 10 yr Govt Bond Yield Index US Treasury Yield Curve Rate T Note Constant Maturity 10 Year (1) Make sure USD is unit currency Australian Dollar (spot / forward exchange rates) Term = 3 months Exchange rate AUD/USD Inflation rate Australia CPI Index US CPI Index Forward AUD USD 3 month Forward points For interest rate, please use Australia 10 year government bond yield index and US 10 Year Treasury yield curve rate. Both interest rates should be mid yield data. The USD is foreign currency and unit currency for both spot / forward exchange rate in your calculation. The term of forward exchange rate is 3 month. Please use CPI Index and US - CPI Index to download inflation rate for Australia and the US respectively. 0 B D E G H J K L M N P Q d) Carry Trade Gain/ Loss b) IRP FWD (AUD/ USD) 1.6479 1.6769 1.8429 2 3 4 1.7901 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 Date 3/31/00 6/30/00 9/29/00 12/29/00 3/30/01 6/29/01 9/28/01 12/31/01 3/29/02 6/28/02 9/30/02 12/31/02 3/31/03 6/30/03 9/30/03 12/31/03 3/31/04 6/30/04 9/30/04 12/31/04 3/31/05 6/30/05 9/30/05 12/30/05 3/31/06 6/30/06 9/29/06 12/29/06 3/30/07 6/29/07 9/28/07 12/31/07 3/31/08 6/30/08 9/30/08 12/31/08 SPOT (AUD/ USD) 1.6473 1.676 1.8425 1.7897 2.0595 1.9545 2.0356 1.9629 1.8771 1.7776 1.8428 1.7801 1.6539 1.4847 1.4696 1.3298 1.3042 1.4306 1.3744 1.2817 1.2938 1.3115 1.3122 1.3617 1.3958 1.3453 1.3403 1.2682 1.2368 1.1774 1.1263 1.1427 1.0952 1.0432 1.262 1.4232 FORWARD PTS 5.58 9.22 3.52 3.61 -0.89 -14.32 -21.33 -29.26 -34.53 -46.28 -41.99 -46.79 -52.22 -58.81 -63.73 -80,64 -83.02 -70.03 -61.75 -54.3 -52.82 -39.96 -29.2 -19.4 -9.93 -8.6 -14.65 -19.7 -22.49 -21.76 -34.46 -50.7 -112.92 -114.03 -35.6 -56.55 2.0594 1.9531 2.0335 1.9600 1.8736 1.7730 1.8386 1.7754 1.6487 1.4788 1.4632 1.3217 1.2959 1.4236 1.3682 1.2763 1.2885 1.3075 1.3093 1.3598 1.3948 1.3444 1.3388 1.2662 1.2346 1.1752 1.1229 1.1376 1.0839 1.0318 1.2584 1.4175 Inflation rate (AUD) 2.8% 3.1% 6.1% 5.8% 6.0% 6.1% 2.5% 3.1% 3.0% 2.8% 3.2% 2.9% 3.3% 2.6% 2.6% 2.4% 2.0% 2.5% 2.3% 2.5% 2.4% 2.5% 3.1% 2.8% 2.9% 4.0% 4.0% 3.3% 2.5% 2.1% 1.8% 2.9% 4.3% 4.4% 5.0% 3.7% 1 (AUD) 6.38% 6.18% 6.23% 5.48% 5.29% 6.06% 5.53% 6.02% 6.35% 6.08% 5.35% 5.17% 5.34% 5.02% 5.39% 5.61% 5.50% 5.95% 5.47% 5.33% 5.67% 5.11% 5.36% 5.20% 5.42% 5.78% 5.51% 5.88% 5.88% 6.26% 6.15% 6.33% 6.05% 6.45% 5.40% 3.99% Inflation rate (USD) (USD) 3.8% 6.26% 3.7% 6.10% 3.5% 5.80% 3.4% 5.19% 2.9% 4.88% 3.2% 5.28% 2.6% 4.73% 1.6% 5.09% 1.5% 5.28% 1.1% 4.93% 1.5% 3.87% 2.4% 4.03% 3.0% 3.81% 2.1% 3.33% 2.3% 4.27% 1.9% 4.27% 1.7% 3.83% 3.3% 4.73% 2.5% 4.13% 3.3% 4.23% 3.1% 4.50% 2.5% 4.00% 4.7% 4.20% 3.4% 4.47% 3.4% 4.3% 5.11% 2.1% 4.72% 2.5% 4.56% 2.8% 4.56% 2.7% 5.10% 2.8% 4.52% 4.1% 4.10% 4.0% 3.51% 5.0% 4.10% 4.9% 3.69% 0.1% 2.42% a) Percenta a) Forward ge b) Change in premium/ Implied Spot discount forward Violated? 164.91% -0.0012868 Yes 0.01742244 0.0006 167.73% -0.0003891 Yes 0.0993436 0.0002 184.99% -0.0070492 Yes -0.0286567 0.0002 179.46% -0.0045730 Yes 0.1507515: -0.0000 206,76% -0.0081989 Yes -0.0509832 -0.0007 196.90% -0.0159125 Yes 0.04149393 -0.0010 205.12% -0.017740 Yes -0.0357142 -0.0015 198.03% -0.0202967 Yes -0.0437108 -0.0018 189.62% -0.022530 Yes -0.0530072 -0.0026 179.70% -0.0240252 Yes 0.03667866 -0.0023 186.91% -0.0304562 Yes -0.0340243 -0.0026 179.96% -0.0241860 Yes -0.0708948 -0.0032 167.83% -0.0295979 Yes -0.1023036 -0.0040 150.90% -0.0301350 Yes -0.0101704 -0.0043 148.54% -0.0221302 Yes -0.0951279 -0.0061 134.69% -0.0251153 Yes -0.0192510 -0.0064 132.52% -0.0293289 Yes 0.09691764 -0.0049 144.72% -0.0236270 Yes -0.0392842 -0.0045 139.20% -0.0238219 Yes -0.0674476 -0.0042 129.52% -0.0189565 Yes 0.0094405 -0.0041 130.83% -0.0197923 Yes 0.0136806: -0.0030 132.55% -0.0179559 Yes 0.0005337 -0.0022 132.68% -0.0175531 Yes 0.03772290 -0.0014 137.12% -0.011455C Yes 0.0250422 -0.0007 140.51% -0.0102565 Yes -0.0361799 -0.0006 135.39% -0.0094353 Yes -0.0037166 -0.0011 135.04% -0.0115245 Yes -0.0537939 -0.0016 128.42% -0.0180044 Yes -0.0247595 -0.0018 125.24% -0.0178627 Yes -0.0480271 -0.0018 119.04% -0.0151262 Yes -0.0434007 -0.0031 114.38% -0.0209568 Yes 0.0145609: -0.0044 116.71% -0.029504 Yes -0.0415682 -0.0103 112.21% -0.0382090 Yes -0.0474799 -0.0109 106.67% -0.034922 Yes 0.2097392 -0.0028 128.28% -0.024311: Yes 0.1277337 -0.0040 144.50% -0.0274990 Yes c) Expected Exchange Rate 163.1% 166.6% 188.9% 183.1% 212.2% 200.9% 203.4% 199.2% 190.5% 180.7% 187.4% 178.9% 165.9% 149.2% 147.4% 133.6% 130.8% 142.0% 137.2% 127.2% 128.5% 131.2% 129.2% 135.4% 138.9% 134.1% 136.5% 127.8% 123.3% 117.1% 111.5% 113.0% 109.8% 103.7% 126.3% 147.4% c)PPP Violated? 1.6% Yes 1.0% Yes -4.6% Yes -4.2% Yes -6.2% Yes -5.5% Yes 0.2% Yes -2.9% Yes -2.8% Yes -3.0% Yes -3.1% Yes -0.9% Yes -0.5% Yes -0.7% Yes -0.4% Yes -0.7% Yes -0.4% Yes 1.1% Yes 0.3% Yes 1.0% Yes 0.9% Yes 0.0% NO 2.0% Yes 0.8% Yes 0.7% Yes 0.4% Yes -2.5% Yes -1.0% Yes 0.4% Yes 0.7% Yes 1.1% Yes 1.3% Yes -0.3% Yes 0.6% Yes -0.1% Yes -5.1% Yes 4.72% Part A (10 marks): Excel Calculations You first need to download the quarterly data of Australia and U.S. from Internet for the period between 2000Q4 and 2017Q4. In order to provide the below analysis, you need to have interest rate, exchange rate, inflation rate and forward rate data for both countries. Hint: Data Download from Internet Interest Rate Australia US Using (mid yield) data- Australia 10 yr Govt Bond Yield Index US Treasury Yield Curve Rate T Note Constant Maturity 10 Year (1) Make sure USD is unit currency Australian Dollar (spot / forward exchange rates) Term = 3 months Exchange rate AUD/USD Inflation rate Australia CPI Index US CPI Index Forward AUD USD 3 month Forward points For interest rate, please use Australia 10 year government bond yield index and US 10 Year Treasury yield curve rate. Both interest rates should be mid yield data. The USD is foreign currency and unit currency for both spot / forward exchange rate in your calculation. The term of forward exchange rate is 3 month. Please use CPI Index and US - CPI Index to download inflation rate for Australia and the US respectively. 0 B D E G H J K L M N P Q d) Carry Trade Gain/ Loss b) IRP FWD (AUD/ USD) 1.6479 1.6769 1.8429 2 3 4 1.7901 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 Date 3/31/00 6/30/00 9/29/00 12/29/00 3/30/01 6/29/01 9/28/01 12/31/01 3/29/02 6/28/02 9/30/02 12/31/02 3/31/03 6/30/03 9/30/03 12/31/03 3/31/04 6/30/04 9/30/04 12/31/04 3/31/05 6/30/05 9/30/05 12/30/05 3/31/06 6/30/06 9/29/06 12/29/06 3/30/07 6/29/07 9/28/07 12/31/07 3/31/08 6/30/08 9/30/08 12/31/08 SPOT (AUD/ USD) 1.6473 1.676 1.8425 1.7897 2.0595 1.9545 2.0356 1.9629 1.8771 1.7776 1.8428 1.7801 1.6539 1.4847 1.4696 1.3298 1.3042 1.4306 1.3744 1.2817 1.2938 1.3115 1.3122 1.3617 1.3958 1.3453 1.3403 1.2682 1.2368 1.1774 1.1263 1.1427 1.0952 1.0432 1.262 1.4232 FORWARD PTS 5.58 9.22 3.52 3.61 -0.89 -14.32 -21.33 -29.26 -34.53 -46.28 -41.99 -46.79 -52.22 -58.81 -63.73 -80,64 -83.02 -70.03 -61.75 -54.3 -52.82 -39.96 -29.2 -19.4 -9.93 -8.6 -14.65 -19.7 -22.49 -21.76 -34.46 -50.7 -112.92 -114.03 -35.6 -56.55 2.0594 1.9531 2.0335 1.9600 1.8736 1.7730 1.8386 1.7754 1.6487 1.4788 1.4632 1.3217 1.2959 1.4236 1.3682 1.2763 1.2885 1.3075 1.3093 1.3598 1.3948 1.3444 1.3388 1.2662 1.2346 1.1752 1.1229 1.1376 1.0839 1.0318 1.2584 1.4175 Inflation rate (AUD) 2.8% 3.1% 6.1% 5.8% 6.0% 6.1% 2.5% 3.1% 3.0% 2.8% 3.2% 2.9% 3.3% 2.6% 2.6% 2.4% 2.0% 2.5% 2.3% 2.5% 2.4% 2.5% 3.1% 2.8% 2.9% 4.0% 4.0% 3.3% 2.5% 2.1% 1.8% 2.9% 4.3% 4.4% 5.0% 3.7% 1 (AUD) 6.38% 6.18% 6.23% 5.48% 5.29% 6.06% 5.53% 6.02% 6.35% 6.08% 5.35% 5.17% 5.34% 5.02% 5.39% 5.61% 5.50% 5.95% 5.47% 5.33% 5.67% 5.11% 5.36% 5.20% 5.42% 5.78% 5.51% 5.88% 5.88% 6.26% 6.15% 6.33% 6.05% 6.45% 5.40% 3.99% Inflation rate (USD) (USD) 3.8% 6.26% 3.7% 6.10% 3.5% 5.80% 3.4% 5.19% 2.9% 4.88% 3.2% 5.28% 2.6% 4.73% 1.6% 5.09% 1.5% 5.28% 1.1% 4.93% 1.5% 3.87% 2.4% 4.03% 3.0% 3.81% 2.1% 3.33% 2.3% 4.27% 1.9% 4.27% 1.7% 3.83% 3.3% 4.73% 2.5% 4.13% 3.3% 4.23% 3.1% 4.50% 2.5% 4.00% 4.7% 4.20% 3.4% 4.47% 3.4% 4.3% 5.11% 2.1% 4.72% 2.5% 4.56% 2.8% 4.56% 2.7% 5.10% 2.8% 4.52% 4.1% 4.10% 4.0% 3.51% 5.0% 4.10% 4.9% 3.69% 0.1% 2.42% a) Percenta a) Forward ge b) Change in premium/ Implied Spot discount forward Violated? 164.91% -0.0012868 Yes 0.01742244 0.0006 167.73% -0.0003891 Yes 0.0993436 0.0002 184.99% -0.0070492 Yes -0.0286567 0.0002 179.46% -0.0045730 Yes 0.1507515: -0.0000 206,76% -0.0081989 Yes -0.0509832 -0.0007 196.90% -0.0159125 Yes 0.04149393 -0.0010 205.12% -0.017740 Yes -0.0357142 -0.0015 198.03% -0.0202967 Yes -0.0437108 -0.0018 189.62% -0.022530 Yes -0.0530072 -0.0026 179.70% -0.0240252 Yes 0.03667866 -0.0023 186.91% -0.0304562 Yes -0.0340243 -0.0026 179.96% -0.0241860 Yes -0.0708948 -0.0032 167.83% -0.0295979 Yes -0.1023036 -0.0040 150.90% -0.0301350 Yes -0.0101704 -0.0043 148.54% -0.0221302 Yes -0.0951279 -0.0061 134.69% -0.0251153 Yes -0.0192510 -0.0064 132.52% -0.0293289 Yes 0.09691764 -0.0049 144.72% -0.0236270 Yes -0.0392842 -0.0045 139.20% -0.0238219 Yes -0.0674476 -0.0042 129.52% -0.0189565 Yes 0.0094405 -0.0041 130.83% -0.0197923 Yes 0.0136806: -0.0030 132.55% -0.0179559 Yes 0.0005337 -0.0022 132.68% -0.0175531 Yes 0.03772290 -0.0014 137.12% -0.011455C Yes 0.0250422 -0.0007 140.51% -0.0102565 Yes -0.0361799 -0.0006 135.39% -0.0094353 Yes -0.0037166 -0.0011 135.04% -0.0115245 Yes -0.0537939 -0.0016 128.42% -0.0180044 Yes -0.0247595 -0.0018 125.24% -0.0178627 Yes -0.0480271 -0.0018 119.04% -0.0151262 Yes -0.0434007 -0.0031 114.38% -0.0209568 Yes 0.0145609: -0.0044 116.71% -0.029504 Yes -0.0415682 -0.0103 112.21% -0.0382090 Yes -0.0474799 -0.0109 106.67% -0.034922 Yes 0.2097392 -0.0028 128.28% -0.024311: Yes 0.1277337 -0.0040 144.50% -0.0274990 Yes c) Expected Exchange Rate 163.1% 166.6% 188.9% 183.1% 212.2% 200.9% 203.4% 199.2% 190.5% 180.7% 187.4% 178.9% 165.9% 149.2% 147.4% 133.6% 130.8% 142.0% 137.2% 127.2% 128.5% 131.2% 129.2% 135.4% 138.9% 134.1% 136.5% 127.8% 123.3% 117.1% 111.5% 113.0% 109.8% 103.7% 126.3% 147.4% c)PPP Violated? 1.6% Yes 1.0% Yes -4.6% Yes -4.2% Yes -6.2% Yes -5.5% Yes 0.2% Yes -2.9% Yes -2.8% Yes -3.0% Yes -3.1% Yes -0.9% Yes -0.5% Yes -0.7% Yes -0.4% Yes -0.7% Yes -0.4% Yes 1.1% Yes 0.3% Yes 1.0% Yes 0.9% Yes 0.0% NO 2.0% Yes 0.8% Yes 0.7% Yes 0.4% Yes -2.5% Yes -1.0% Yes 0.4% Yes 0.7% Yes 1.1% Yes 1.3% Yes -0.3% Yes 0.6% Yes -0.1% Yes -5.1% Yes 4.72%