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Suppose that the nine-month U.S. risk-free interest rate is 2.5% and the Australias risk-free rate is 1.5% (both expressed with continuous compounding). What is the
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Suppose that the nine-month U.S. risk-free interest rate is 2.5% and the Australias risk-free rate is 1.5% (both expressed with continuous compounding). What is the nine-month forward exchange rate (U.S. dollar per Australian dollar) assuming that the current exchange rate is 0.76 U.S. dollars per Australian dollar?
A. | 0.754 | |
B. | 0.766 | |
C. | 0.774 | |
D. | 0.832 |
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