An Australian investor holds a one month long forward position on USD. The contract calls for the
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An Australian investor holds a one month long forward position on USD. The contract calls for the investor to buy USD 2 million in one month’s time at a delivery price of $1.4510 per USD. The current forward price for delivery in one month is F= $1.5225 per USD. Suppose the current interest rate interest is 5%. What is the value of the investor’s position?
Expert Answer:
Contracted forward rate F C 14510 per USD The current forward price for delivery ... View the full answer
Related Book For 
Introduction to Corporate Finance What Companies Do
ISBN: 978-1111222284
3rd edition
Authors: John Graham, Scott Smart
Posted Date:
