Determining the quality of a business

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Q1. An Australian investor wishes to hedge the currency risk for her portfolio using a forward. Currently, the $A/$US spot rate is $0.72, while the relevant US interest rate is 1.1% and the corresponding Australian rate is 2.6%. What 12-month forward rate should the investor expect to be offered?

Q2. Do you agree with the statement that: "Other things being equal, the higher the quality of a business the more it should be worth"? Describe the quantitative and qualitative factors you consider important in determining the quality of a business.

Reference no: EM132666055

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