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Compute the value (Mark-to-market) of the following long forward contract in Australian dollars (AUD). The contract expires in one year. The size of the contract
Compute the value (Mark-to-market) of the following long forward contract in Australian dollars (AUD). The contract expires in one year. The size of the contract is AUD 500,000; the forward rate F1USD/AUD = 0.72, the current spot rate X USD/AUD = 0.65, and the two one-year interest rates are as follows: rAUD= 6% and rUSD = 4%. The mark-to-market value is
A. Negative USD 46,369.52
B. Positive USD 46,369.52
C. Positive USD 39,550.08
D. Negative USD 39,550.08
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