Suppose the Spot Exchange Rate Is AUD/SGD0

question 91

Essay

Suppose the spot exchange rate is AUD/SGD0.9820, and that interest rates in Australia are 5% p.a.while those in Singapore are 3% per annum.
A.Calculate the 180-day forward rate.(Note that Singapore uses a 365-day financial year.)
B.What is the size of the forward premium or forward discount?
C.What arbitrage opportunity would exist if you were able to trade a 180-day forward contract at AUD/SGD0.9820?

---

Definitions:

Nature of Self

The essential qualities, identities, and characteristics that define an individual's sense of self.

Negative Reinforcement

Withdrawal of an aversive experience, which serves as a rewarding consequence of a behavior. For example, rewarding your dog for sitting on command by removing a restraining muzzle.

TV Privileges

The allowance or permission granted to someone, especially children, to watch television, often used as a reward or incentive.

Compliance

The act of conforming, submitting, or adapting one's behavior to align with the rules, demands, or expectations of others.