Question: The U.S. dollar (USD) deposit interest rate is 1%, while Australia's (AUD) rate is 3.5%, with a 1.5000 USD/AUD exchange rate. What should be the

The U.S. dollar (USD) deposit interest rate is 1%, while Australia's (AUD) rate is 3.5%, with a 1.5000 USD/AUD exchange rate.

What should be the 1-year forward exchange rate for USD/AUD under Interest Rate Parity?

The annual interest rate in the AUS and UK are 5% and 8% respectively. The current spot rate is $1.50/ and the 1 year forward rate is $1.48/.

Can arbitrage profits be made from the above situation?

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