Question: Because it is unlikely she will be able to visit you this year, your wealthy American aunt wants to send you a present for your

Because it is unlikely she will be able to visit you this year, your wealthy American aunt wants to send you a present for your birthday. You expect she will give you USD 9420 in 3 months.

Having taken this course, you know you can lock in the AUD rate for this USD receivable using a money market hedge.

(Annualized) 3-month interest rates in the US are 6.2%-6%, and 3-month interest rates in Australia are 2%-1.8%.

The current bid-ask spot rates are 1.235-90 AUD/USD.

What is the locked in AUD value of this present?

12136.5318

7711.0573

11507.6826

11761.0974

11755.3066

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