Calculate the 120-Day AUD/USD Forward Points If the Spot Rate

question 9

Essay

Calculate the 120-day AUD/USD forward points if the spot rate is AUD/USD0.9334 and interest rates are 2% in the US and 4% in Australia (use a 360-day-year for the US and a 365-day-year for Australia).

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Definitions:

Economic Efficiency

A situation where resources are allocated in a way that maximizes the production of goods and services at the lowest cost to society.

Pollution

The introduction of contaminants into the natural environment, causing adverse change.

Automobiles

Motor vehicles with four wheels designed to transport passengers on roads.

Public Good

Services or products that are non-excludable and non-rivalrous, benefiting all members of a society and not diminished by individual use.