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The Current Spot Exchange Rate Between Australian Dollars and UK

Question 17

Multiple Choice

The current spot exchange rate between Australian dollars and UK pounds is A$1 = 0.400 pounds.Interest rates for one year are 5 per cent for pounds and 15 per cent for dollars.What is the expected spot exchange rate in one year's time?


A) 0.3652
B) 0.4600
C) 0.4200
D) 0.4380

Correct Answer:

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