ssume that interest rate parity exists. You expect that the one-year nominal interest rate in the U. S. is 7%, while the one-year nominal interest rate in Australia is 11%. The spot rate of the Australian dollar is $.60. You will need 10 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 fulfill your forward contract? A. $5,784,000 B. $5,387,000 C. $6,184,000 D. $8,356,000
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