Nominal interest rate, If one-year nominal interest rate in

Nominal interest rate

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Reference no: EM13731907

If one-year nominal interest rate in the U.S. is 3%, while the one-year nominal interest rate in Australia is 5%. The spot rate of the Australian dollar is $.96. Interest Parity is held. You will need 5 million Australian dollars in one year. Today, you purchase a one-year forward contract in Australian dollars. How many U.S. dollars will you need in one year to fulfil your forward contract?

Reference no: EM13731907

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