Fight Finance

Courses  Tags  Random  All  Recent  Scores

Scores
keithphw$6,001.61
Zin$1,502.43
Carolll$1,433.33
Visitor$1,268.61
cuiting$1,249.70
Jade$1,145.80
Visitor$1,108.33
Visitor$1,071.28
Skywalke...$1,070.00
mm11$1,050.33
ninalee$1,039.70
Visitor$1,024.70
Visitor$1,005.61
Visitor$966.00
victor$934.70
zy$919.70
Doris$889.70
Visitor$840.00
Yuan$823.33
Emma Lu$810.00
 

Question 246  foreign exchange rate, forward foreign exchange rate, cross currency interest rate parity

Suppose the Australian cash rate is expected to be 8.15% pa and the US federal funds rate is expected to be 3.00% pa over the next 2 years, both given as nominal effective annual rates. The current exchange rate is at parity, so 1 USD = 1 AUD.

What is the implied 2 year forward foreign exchange rate?




Copyright © 2014 Keith Woodward