Consider the following: $$\begin{array} { | l | l | }
\hline \text { Risk-free rate in the United States } & 0.04 \text { year } \
\hline \text { Risk-free rate in Australia } & 0.03 / \text { year } \
\hline \text { Spot exchange rate } & 1.67 \mathrm { A } \$ /\$ \
\hline
\end{array}$$
-What should be the proper futures price for a 1-year contract?
A)1.703 A$/$
B)1.654 A$/$
C)1.638 A$/$
D)1.778 A$/$
E)1.686 A$/$

Question

Consider the following: $$\begin{array} { | l | l | } 
\hline \text { Risk-free rate in the United States } & 0.04 \text { year } \
\hline \text { Risk-free rate in Australia } & 0.03 / \text { year } \
\hline \text { Spot exchange rate } & 1.67 \mathrm { A } \$ /\$ \
\hline
\end{array}$$
-What should be the proper futures price for a 1-year contract?
A)1.703 A$/$
B)1.654 A$/$
C)1.638 A$/$
D)1.778 A$/$
E)1.686 A$/$

Quizplus · Accepted Answer

The Answer of Consider the following: $$\begin{array} { | l | l | } 
\hline \text { Risk-free rate in the United States } & 0.04 \text { year } \
\hline \text { Risk-free rate in Australia } & 0.03 / \text { year } \
\hline \text { Spot exchange rate } & 1.67 \mathrm { A } \$ /\$ \
\hline
\end{array}$$
-What should be the proper futures price for a 1-year contract?
A)1.703 A$/$
B)1.654 A$/$
C)1.638 A$/$
D)1.778 A$/$
E)1.686 A$/$

Consider the Following -What Should Be the Proper Futures Price for a 1-Year