Calculate the six-month forward exchange rate between Great Britain Pound (GBP) and Australian dollar (AUD) if the
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- Calculate the six-month forward exchange rate between Great Britain Pound (GBP) and Australian dollar (AUD) if the spot exchange rate for GBP is 1.645 AUD, the Australian risk-free rate is 2.50% and UK risk-free rate is 2%. Assume that the interest rates are annually compounded.
- Calculate the six-month forward exchange rate between Great Britain Pound (GBP) and Australian dollar (AUD) if the spot exchange rate for GBP is 1.645 AUD, the Australian risk-free rate is 2.50% and UK risk-free rate is 2%. Assume that the interest rates are continuously compounded.
- Suppose you buy a forward contract today at a price of $95. The contract expires in 30 days. The risk-free rate is 3 percent. Now 10 days later, the spot price of the asset is $10. What is the value of this forward contract 10 days after the contract was bought? Assume that the interest rates are annually compounded.
- Suppose you buy a forward contract today at a price of $95. The contract expires in 30 days. The risk-free rate is 3 percent. Now 10 days later, the spot price of the asset is $102. What is the value of this forward contract 10 days after the contract was bought? Assume that the interest rates are continuously compounded.
Related Book For
Fundamentals Of Financial Management
ISBN: 9780357517574
16th Edition
Authors: Eugene F. Brigham, Joel F. Houston
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