A company enters into a 1-year forward contract to sell \(\$ 100\) for AUD150. The contract is initially at the money. In other words, the forward exchange rate is 1.50 . The 1 -year dollar risk-free rate of interest is \(5 \%\) per annum. The 1 -year dollar rate of interest at which the counterparty can borrow is \(6 \%\) per annum. The exchange rate volatility is \(12 \%\) per annum. Estimate the present value of the cost of defaults on the contract. Assume that defaults are recognized only at the end of the life of the contract.