Question: The current exchange rate between the AUD and the USD is 1.80 (AUD/USD) and the annual interest rates on AUD and the USD are 6%

The current exchange rate between the AUD and the USD is 1.80 (AUD/USD) and the annual interest rates on AUD and the USD are 6% and 4% respectively. What shall be the expected exchange rate in three-months if uncovered interest parity (UIP) holds?

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