1. A company holding Australian dollars wishes to purchase UK Pounds. The current AUD/GBP (Australian Dollar/Swiss Franc) exchange rate is .4728. The rate on the 10 year bond (U.K.) is 1.79%. The rate on the 10 year AUD bond is 2.75%. What is the value of a 10 year forward?
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2. A company holding Australian dollars wishes to purchase UK Pounds. The current AUD/GBP (Australian Dollar/Swiss Franc) exchange rate is .4728. The rate on the 10 year bond (U.K.) is 1.79%. What is the value of a 10 year prepaid forward?
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