Question: Calculate the monthly interest rate differences and estimate the AUD/USD exchange rate for each month from November 2017 through September 2018 using the interest parity

Calculate the monthly interest rate differences and estimate the AUD/USD exchange rate for each month from November 2017 through September 2018 using the interest parity model. Display the following results in a single table with workings: iii. the difference between the actual and the forecasted exchange rates for each month (i.e. forecast error); and, (2 points)

01-Oct-2017 01-Nov-2017 01-Dec-2017 01-Jan-2018 01-Feb-2018 01-Mar-2018 01-Apr-2018 01-May-2018 01-Jun-2018 01-Jul-2018 01-Aug-2018 01-Sep-2018

01-Oct-2017 01-Nov-2017 01-Dec-2017 01-Jan-2018 01-Feb-2018 01-Mar-2018 01-Apr-2018 01-May-2018 01-Jun-2018 01-Jul-2018 01-Aug-2018 01-Sep-2018 01-Oct-2018 Exchange rate (USD per AUD) AUD 1 year zero rate (%, p.a.) USD 1 year zero rate (%, p.a.) 0.769764 1.6200 1.3349 0.756659 1.5600 1.4469 0.780823 1.5600 1.6189 0.81011 1.6100 1.7618 0.779362 1.6000 1.9247 0.767813 1.5800 2.0319 0.757518 1.5800 2.0968 0.757117 1.5700 2.2771 0.734646 1.5500 2.2867 0.74073 1.5400 2.3565 0.726164 1.5600 2.4574 0.722543 1.5400 2.4866 0.709925 1.5600 2.6196

Step by Step Solution

★★★★★

3.55 Rating (169 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Following are the formulae used for each column in table given below Exchange Rate AUD USD 1 Exchange Rate USDAUD Per Month Interest Rate AUD AUD 1 Ye... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Using computer software, find the least-squares regression line for the data in Problem 4-10. Based on the F test, is there a statistically significant relationship between the demand for guitars and...

The following table shows interest rates and exchange rates for the U.S. dollar and the Philippine peso in 2007. The spot exchange rate is 47.46 pesos = $1. Complete the missingentries: 3 Months 5.3...

Calculate the estimate for the standard error of difference between two independent means for each of the following cases: a. s-12,Si=15. n1=16, and n2-21 b. s_ 0.05452 = 0.087, ni-8, and n-= 10 c....

Table 2.18 shows the differences in obesity rates (called Rate Change in the table) for the years 2010 and 1997 for each of the 50 states and the District of Columbia. The obesity rate is the...

A paper by R. N. Rodriguez (Health Care Applications of Statistical Process Control: Examples Using the SAS System,, SAS Users Group International: Proceedings of the 21 st Annual Conference , 1996)...

determine the stock turnover for a 6 month period feb $20,000.00 $32,000.00 mar $28,000.00 $38,000.00 apr $27,000.00 $35,000.00 may $24,000.00 $36,000.00 jun $18,000.00 $29,000.00 jul $23,000.00...

Month Labour Hours (X) Overhead Costs (Y) Jan 198 $414 Feb 175 $386 Mar 289 $519 Apr 298 $534 May 184 $404 Jun 263 $490 Jul 140 $360 Aug 380 $540 What is the slope of this data, using the high-low...

Sound Sensation Inc. is a small manufacturer of electronic musical instruments. The plant manager received the following variable factory overhead report for the period: The plant manager is not...

What variances do managers use in trying to understand the difference between actual and planned revenue?

Karebien, Inc., has two plants that manufacture a line of hospital beds. One plant is in St. Louis and the other in Oklahoma City. Each plant is set up as a profit center. During the past year, both...

(a) Calculate the speed of a proton that is accelerated from rest through a potential difference of 120 V. (b) Calculate the speed of an electron that is accelerated through the same potential...

On January 1 of the current year, the Barton Corporation issued 10% bonds with a face value of $200,000. The bonds are sold for $191,000. The bonds pay interest semiannually on June 30 and December...

Danielle Neylon has trouble keeping her debits and credits equal. During a recent month, Danielle made the following accounting errors: a. In preparing the trial balance, Danielle omitted a $7,000...

Sunland Company uses a periodic inventory system. Its records show the following for the month of May in which 7 2 units were sold. May 1 inventory 3 1 units $ 1 0 3 1 0 total cost May 1 5 purchases...

Marsha Jones, whom you met in the Chapter Mini-case, has bought a used Mercedes horse transporter for her Connecticut estate. It cost $35,000. The object is to save on horse transporter rentals....

Cheaney Corporation owns a number of cruise ships and a chain of hotels. The hotels, which have not been profitable, were discontinued on September 1, 2010. The 2010 operating results for the company...

A condensed income statement by product line for British Beverage Inc. indicated the following for Royal Cola for the past year: Sales $254,000 Cost of goods sold 122,000 Gross profit . $132,000...

CVP analysis, margin of safety Suppose Doral Corp.s breakeven point is revenues of $1,100,000. Fixed costs are $660,000. Required 1. Compute the contribution margin percentage. 2. Compute the selling...

Data for Mazor Company are presented in P12-3A. Instructions Prepare the operating activities section of the statement of cash flows using the direct method.

indicate the wider applications derived from the main points of the united airline pestel analysis

A Car Loan: Suppose the amount of principal left to be paid back on a car loan is given by P(t) and suppose a payment of k dollars is made on the loan each month. Then the rate at which the remaining...

At an MRSP of $41,000 the cutting-edge Telsa Model 3 comes in at a relatively affordable $33,500 after the $7500 federal tax credit is deducted. The lease option was created to make the car even more...

Maths. literacy help MATHEMATICAL LITERACY (Paper 1) 10601/21 4.2,3 Calculate the total cost, in bank fees, to the business when John deposits. R1 1 300,00 at an FNB branch. 4.2.4 The FNB Business...

11.If the annual required rate of return associated with the cash flows below is 10 percent, then what is the value of these cash flows evaluated as of Year 6? Year Cash Flow 5$100 6$200 7$300 8$400...

Please note: all the questions are essay-type questions and you should attempt and answer each question in Excel. 3. Your lovely wife has decided to buy you a vacuum cleaner for your birthday (she...

4) If we know that a put option with strike price $16.5 of a stock with the sport price $18.4 for 6 months (suppose we have a quarterly 0.4% risk-free rate) costs 2.3$, what is the price for a call...