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A Bank Has Been Asked to Provide a Three-Month Forward

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A bank has been asked to provide a three-month forward AUD/USD 'buy' quote for a corporate client.The following information is available to the FX dealer at the bank:
Spot rate:AUD/USD 0.7654-0.7659
US interest rates:7.73% per annum
Australian interest rates:8.64% per annum
Estimate the three-month forward 'buy' rate.


Definitions:

Accounting Cycle

The comprehensive process of recording and processing all financial transactions of a company, from when the transaction occurs, to its representation on the financial statements.

Adjusted Trial Balance

A version of the trial balance that reflects account balances after adjustments are made for accruals, deferrals, and errors.

Unadjusted Trial Balance

A preliminary list of all accounts in the general ledger with their balances to check the equality of debits and credits before adjustments.

Contra Asset

An account on a company's balance sheet that reduces the value of a related asset account.

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