Explain how many u.s dollars will you need in one year

Assignment Help Finance Basics

Reference no: EM1344605

Consider that interest rate parity exists. You expect that the 1-year nominal interest rate in the United States is 7 percent, while the 1-year nominal interest rate in Australia is 11 percent. The spot rate of the Australian dollar is $0.60. You will need 10 million Australian dollars in 1 year. Today, you purchase a 1-year forward contract in Australian dollars. How many U.S dollars will you need in 1 year to fulfill your forward contract?

Reference no: EM1344605

Questions Cloud

Find out the work done by the force of friction : A flight attendant pulls her 64 N flight bag a distance of 370 m along a level airport floor at a constant velocity. The force she exerts is 45 N at an angle of 51° above the horizontal.

Compute that michael budget constraint will : If the prices of pizza and submarine sandwiches double and so does Michael's money income, we can compute that Michael's budget constraint will.

Private-sector financial management techniques : Public school systems are not noted for providing student education at minimum cost.

What is the mass m of fish : A plane leaves the airport in Galisto and flies 170 km 68 degrees east of north and after that changes direction to fly 230 km at 48 degrees south of east, after that it makes an immediate emergency landing in a pasture. When airport sends out a r..

Explain how many u.s dollars will you need in one year : Explain how many U.S dollars will you need in one year to fulfill your forward contract?

Find the retarding force : A swimming pool has dimensions 32 m 11 m and a flat bottom. When the pool is filled to a depth of 2.10m with fresh water, what is the force caused by the water on the end that is 11m.

Illustrate what relationship must hold between x and p : Illustrate what relationship must hold between x and p so that A second order stochastically dominates B.

Find out the coefficient of kinetic friction : A flight attendant pulls her 65N flight bag a distance of 388m along a level airport floor at a constant velocity. The force she exerts is 38 N at an angle of 51° above horizontal.

Explaining threat category : An individual threat can be represented in more than one threat category. If a hacker hacks into a network, copies a few files.

User Account

All Pages