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Determine mark-to-market value of the short forward gbp

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Problem 1: Compute the mark-to-market value of the following short forward GBP contract. The size of the contract is GBP 3,800,000 and the forward rate is F3USD/GBP = 1.34; the spot rate at time of the valuation (today) is XNUSD/GBP = 1.20. The GBP and USD interest rates are: rGBP = 5% and rUSD = 4% ; assume the contract matures three years from now (so at t=3).

Reference no: EM132479170

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