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The spot exchange rate between Australia and New Zealand is AUD 1.000 = NZD 1.19. Interest rates in Australia and New Zealand are 4% and

The spot exchange rate between Australia and New Zealand is AUD 1.000 = NZD 1.19. Interest rates in Australia and New Zealand are 4% and 7% per annum respectively.

Calculate the fair forward price for delivery of AUD in 10 months time.

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