Your company will receive AUD2,000,000 in 90 days. To convert this amount into USD, you contact a
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Question:
Your company will receive AUD2,000,000 in 90 days. To convert this amount into USD, you contact a bank to sell AUD forward. Here is the information you got:
90 day forward rate: AUD1 = USD0.85
Today spot rate: AUD1 = USD0.90
After 90 days, market spot rate is AUD1 = USD0.92
90 day Forward rate premium/discount is
_____%
I GOT THIS ANSWER WRONG IT ISN'T 5.56%
I DID IT THIS WAY
Also, I posted this yesterday & ? got the same answer I have.
0.85 - 0.09/0.90 * 100 = -5.5555
= 5.56
Please answer and show what you did so I can see what I did wrong.
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date: