You have to make a
90,000,000 payment in Japanese Yen on close of business day,
Friday, January 17th. You decide to hedge your risk with the
futures contracts. Assume you that you enter into the futures
position at a close of day on Tuesday, January 14th. Futures and
spot data are provided in the file HW1_data.doc. Contract size is
12,500,000 yen.
- Describe the position you decide to enter (long or short).
- Describe the contract (what month, and what quantity).
- Document the gain or loss due to marking to market every day that your position is open.
- What is the total cost in US$ after you have closed out your futures positions, and made your payment?
- What would have been the total cost in US$, if you had not hedged? Did you benefit from hedging?
- Repeat steps a) – e) assuming that you expect to receive a payment of 900,000 British pounds on close of business day, Friday, January 17th. Assume you that you enter into the futures position at a close of day on Tuesday, January 14th. Futures and spot data are provided in the file HW1_data.doc. Contract size is 62,500 British pounds.
Homework Answers
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You have to make a
90,000,000 payment in Japanese Yen on close of business day,
Friday,...
You have to make a 90,000,000 payment in Japanese Yen on close of business day, Friday,...
You have to make a 90,000,000 payment in Japanese Yen on close
of business day, Friday, January 18th. You decide to hedge your
risk with the futures contracts. Assume you that you enter into the
futures position at a close of day on Tuesday, January 15th.
Futures and spot data are provided BELOW. Contract size is
12,500,000 yen.
Describe the position you decide to enter (long or
short).
Describe the contract (what month, and what
quantity).
Document the gain or...
You have to make a 90,000,000 payment in Japanese Yen on close of business day, Friday,...
You have to make a 90,000,000 payment in Japanese Yen on close
of business day, Friday, January 18th. You decide to hedge your
risk with the futures contracts. Assume you that you enter into the
futures position at a close of day on Tuesday, January 15th.
Futures and spot data are provided in the file BELOW. Contract size
is 12,500,000 yen.
Describe the position you decide to enter (long or short).
Describe the contract (what month, and what quantity).
Document...
Name Chapter 3 1) You observe a quotation of the Japanese yen (K) of $0.007. You...
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calls?
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You have to make a 90,000,000 payment in Japanese Yen on close
of business day, Friday, January 18th. You decide to hedge your
risk with the futures contracts. Assume you that you enter into the
futures position at a close of day on Tuesday, January 15th.
Futures and spot data are provided BELOW. Contract size is
12,500,000 yen.
Describe the position you decide to enter (long or
short).
Describe the contract (what month, and what
quantity).
Document the gain or...
You have to make a 90,000,000 payment in Japanese Yen on close
of business day, Friday, January 18th. You decide to hedge your
risk with the futures contracts. Assume you that you enter into the
futures position at a close of day on Tuesday, January 15th.
Futures and spot data are provided in the file BELOW. Contract size
is 12,500,000 yen.
Describe the position you decide to enter (long or short).
Describe the contract (what month, and what quantity).
Document...
Name Chapter 3 1) You observe a quotation of the Japanese yen (K) of $0.007. You are, however, interested in the number of yen per dollar. Thus, you calculate thequotation of /s a. direct; 142.86 b. indirect; 142.86 c. indirect; 150 d. direct; 150 e. indirect, 0 2) Which of the following is probably NOT appropriate for an MNC wishing to reduce its exposure to British pound payables? a. Purchase pounds forward b. Buy a pound futures contract c. Buy...
Use the accompanying chart of currency futures market activity,
for Wednesday, December 30, 2010 to answer this question. Of the
seven currency futures shown, using the March, 2011 contracts only,
assuming equal volatility for each currency, which one had the
highest fairly priced dollar value for its at the money 90 day
calls?
Currency Futures Trading Summary for Thursday, December 30,
2010
Japanese Yen (CME)-12,500,000; $ per 100% LIFETIME Open High Low Settle Chg High (▲ ▼) Low 1.0621 1.1021...
You are starting a new business of Shoes to be sold through internet and specialized stores You can produce 3 per day. You'll work 18 days a month You have a potential customer- which will buy a minimum quantity of 60, they have promised sales of 300 per year, they pay at 60 days You expect to sell 20 per month by internet as of March You need 0.5 square meters of leather & 0.5 kgs of rubber Your rubber...
Refer to Table 10-6 Price quotes are stated in 1/64ths a. How many ExxonMobil October 2016 $90.00 put options were outstanding at the open of trading on August 3, 2016? b. What was the closing price of a 10-year Treasury note December 13300 futures call option on August 3, 2016? c. What was the closing and dollar price of a December 2160 call option on the S&P 500 Stock Index futures contract on August 3. 2016? d. What was the...
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Fill in the cash budget form according to the fact sheet.
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