Question
Compute the mark-to-market value of the following long forward Australian Dollar (AUD) contract. The size of the contract is AUD 1,000,000 and the forward rate
Compute the mark-to-market value of the following long forward Australian Dollar (AUD) contract. The size of the contract is AUD 1,000,000 and the forward rate is F1USD/AUD = 0.85; the spot rate at time of the valuation (today) is XNUSD/AUD = 0.75. The AUD and USD interest rates are: rAUD = 7% and rUSD = 2%; assume the contract matures one year from now (so at t=1). Group of answer choices USD -49,600.14 USD -132,398.75 USD -45,611.05 USD 89,400.44
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
International Financial Reporting A Practical Guide
Authors: Alan Melville
6th edition
978-1292200743
