What is marked-to-market value of company forward position

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Question

A US company is exporting goods to Canada. It has entered into a 1-year currency forward contract to exchange 1 million Canadian dollars against US dollars. At contract inception, the spot exchange rate was 0.78 USD/CAD, the domestic interest rate was 4.94% per annum with continuous compounding, and the foreign interest rate was 2.75% per annum with continuous compounding. Six months later, the risk-free interest rates remain unchanged but the new spot exchange rate is 0.74 USD/CAD. What is the marked-to-market value (in US dollars) of the company's forward position?

Reference no: EM133272545

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