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Compute and assume the contract matures in four years

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Question 1: Compute the mark-to-market value of the following short forward NZD (New Zealand Dollar) contract. The size of contract is NZD 5,000,000 and the forward rate is F4USD/NZD = 0.79; the spot rate at time of the valuation (today) is XNUSD/NZD = 0.71. The NZD and USD interest rates are: rNZD = 8% and rUSD = 2%; assume the contract matures in four years from now (so at t=4).

Reference no: EM132479173

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