The spot exchange rate between Australia and New Zealand is AUD 1.000 = NZD 1.26. Interest rates
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Question:
The spot exchange rate between Australia and New Zealand is AUD 1.000 = NZD 1.26. Interest rates in Australia and New Zealand are 4% and 7% per annum respectively.
Calculate the fair forward price for delivery of NZD in 10 months time.
Your answer will be expressed in terms of AUD. Give an answer to 4 decimal places
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