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Compute the mark-to- market value of the following long forward Australian Dollar (AUD) contract. The size...

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 F1 USD/AUD= 0.85; the current spot rate of the valuation (today) is Xn USD/AUD= 0.75. The AUD and USD interest rates are: rAUD= 7% and rUSD= 2%; assume the contract matures in one year from now (so at t=1).

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