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QUESTION

USD/AUD June 1:7566 Nov 28:7233 USD/Pound: June 1:3358 Nov 28:2766 AUD/Pound: June 1:7566/1.3358 = 0.5664 Nov 28:7233/1.2766 = 0.5666 CIP:

USD/AUD June 1: 0.7566

                  Nov 28: 0.7233

USD/Pound: June 1: 1.3358

                     Nov 28: 1.2766

AUD/Pound: June 1: 0.7566/1.3358 = 0.5664

                     Nov 28: 0.7233/1.2766 = 0.5666

CIP: 

This is then transposed to find the Forward Rate, 28thof November 2018,

F = 0.5664 * (1.75)/(1.25)

F = 0.5664 * 1.4

F = 0.79296

Based on the information above, with exchange rates and the forward rate, how would you tackle the following question? I am not asking for the answer, simply a guide to answering this.

FAU$/£

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