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Posted on Aug 20, 2024

Imagine that the interbank AUD / USD exchange rate was 0.8062 / 0.7995 and the five-month forward margins on the AUD were -93 / -90.

a) Do you think the AUD was selling at a forward premium or a forward discount to the USD? Explain.

b) Calculate the outright five-month forward quote.

c) Using the direct bid quotation, find the annualised forward premium or discount on the AUD.

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