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Question 1: Determine and 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).
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