Question

L a Cervantes. La Cervantes is a currency speculator and she sels eight June futures contracts for 500,000 pesos at the closing price quoted here: a. What is the value of tret positional matunty the ending spot rate is $0.12004/Ps? b. What is the value of her position at matunity the ending spotrate is $0.09809/Ps? G. What is the value of her position at maturity of the ending spotrate is $0.11006/Ps? i Data Table a. What is the value of her position at m udy the ending spotrais $0.12004/PS? The value of Amber's pouton (Round to the nearest.com. Use a minus sign if value is negative . What is the value of her position may the ending sport is $0.09809/PS? The value of Amber's position is Hound to the nearest cent. Use a mis sign if value is negativo c. What is the value of her position of marty the ending spot is $0.11005PS? The value of Aber's ponton is s o und to the nearest con. Use a minus signifile is negative (Click on the icon to import the table into a spreadsheet.) Mexican Peso (CME) MXN 500,000, $ per MXN Lifetime Maturity Open High Low S ettle Change High Low March 0.109530.10988 0.10030 0.10058 0.1 1000 0.09770 0.10790 0.10796 0.10778 0.10773 0.10000 0.09730 0.10615 0.10615 0.10610 0.10573 010615 0.09830 Opere deres 34,481.00 3.405.00 1,481.00

Answer 1

As on 1st June Futures Contract = 500000 Pesos (MXN)

Number of Contracts Sold = 8

From the given table,

Initial Exchange Rate = 0.10773 $ / MXN

Initial Position Value = 8 x 500000 x 0.10773

= $ 430920

(a) Final Exchange Rate = $ 0.12002 / MXN

Final Position Value = 8 x 500000 x 0.12002

= $ 480080

Net Position Value = 430920 - 480080 = - $ 49160

(b) Final Exchange Rate = $ 0.09802 / MXN

Final Position Value = 8 x 500000 x 0.09802

= $ 392080

(c)

Final Exchange Rate = $ 0.11005 / MXN

Final Position Value = 8 x 500000 x 0.11005

= $ 440,200