Question
Interest rates in Australia are currently 2.35% p.a. and in Chile interest rates are currently offered at 10.75% p.a. Current exchange rates are AUD/USD 0.6836
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Interest rates in Australia are currently 2.35% p.a. and in Chile interest rates are currently offered at 10.75% p.a. Current exchange rates are AUD/USD 0.6836 and 882.25 USD/CLP
The AUD/USD one year forward points are 29. The USD/CLP one year forward points are 15.
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(a) Generate a one-year forecast for the value of the Australian Dollar in terms of Chilean Pesos using unbiased forward expectations (4 Decimal places)
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(b) Generate a two-year forecast for the value of the Australian Dollar in terms of Chilean Pesos using the International Fisher Effect. (4 Decimal places)
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The Exchange Traded Funds Manual
Authors: Gary L. Gastineau
2nd Edition
0470482338, 978-0470482339
