If a 12-Month AUD/NZD Swap Is Quoted 53/47, Which of the Following

question 559

Multiple Choice

If a 12-month AUD/NZD swap is quoted 53/47, which of the following statements would you consider to be correct?

• A) 12-month AUD rates are higher than 12-month NZD rates
• B) 12-month AUD rates are lower than 12-month NZD rates
• C) Spot AUD/NZD will be higher by approximately 50 points in 12 months
• D) The AUD yield curve is positive, whilst the NZD curve is negative

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Definitions:

Price Level

A measure of the average prices of goods and services in an economy at a specific point in time.

Aggregate Demand Curve

A graphical representation showing the relationship between the total quantity of goods and services demanded and the overall price level.

Vertical Axis

In a graph or chart, the y-axis, which is typically used to measure the dependent variable or the value being investigated.

Price Level

A measure of the average of current prices across the entire spectrum of goods and services produced in the economy, often used to analyze inflation.