Question
Suppose we have a spot exchange rate of 0.8685 U.S. dollars per 1 Australian dollar. However, the 3-month forward rate is 0.8625 U.S. dollars per
Suppose we have a spot exchange rate of 0.8685 U.S. dollars per 1 Australian dollar. However, the 3-month forward rate is 0.8625 U.S. dollars per 1 Australian dollar. Calculate the premium or discount of the Australian dollar in the forward rate (calculate it at an annual % rate). Explain how this premium or discount can occur because of interest rates.
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Fundamentals Of Healthcare Finance
Authors: Paula H. Song, Kristin L. Reiter
4th Edition
1640553223, 978-1640553224
