Question
Use the following spot and forward bid-ask rates for the Australian dollar/U.S. dollar exchange rate from 2020. Calculate the annual forward premium on AUD for
Use the following spot and forward bid-ask rates for the Australian dollar/U.S. dollar exchange rate from 2020. Calculate the annual forward premium on AUD for all maturities
AUD/USD Spot: Bid=0.6709 and Ask= 0.6705
| Bid | Ask | |
| AUD/USD Spot | 0.6709 | 0.6705 |
| AUD/USD 1-Month Forward | 3.267 | 3.893 |
| AUD/USD 2-Month Forward | 7.4 | 7.6 |
| AUD/USD 3-Month Forward | 9.969 | 11.731 |
| AUD/USD 6-Month Forward | 21.4 | 21.9 |
| AUD/USD 1-Year Forward | 41.3 | 42.3 |
| AUD/USD 2-Year Forward | 65.4 | 70.4 |
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Financial Management Theory and Practice
Authors: Eugene F. Brigham, Michael C. Ehrhardt
15th edition
130563229X, 978-1305632301, 1305632303, 978-0357685877, 978-1305886902, 1305886909, 978-1305632295
