1) In May, a US company has contracted to pay 375,000 euro for German doll houses from a German firm in June. The current cash euro price is $1.07. The U.S. firm is concerned that the euro will appreciate in the interim and hedges when the June futures price of the euro is at $1.06. (Contract size is 125,000 euro.) When the U.S. company lifts its hedge and pays for the doll houses, the cash price of euro is $1.09 and its futures price is $1.07. Had the U.S. company not hedged, it would have paid how many more or fewer U.S. dollars for the doll houses?

A) $1250 more

B) $3750 less

C) $1250 less

D) $3750 more

2) A customer is long two March wheat contracts at 251 3/4 cents per bushel. The price of the March wheat futures has risen to 262 1/2 cents per bushel. In order to protect her gain, the customer asks you to enter a stop order at 259 1/2 cents per bushel, and the stop is executed at 258 1/4 cents per bushel. Total commissions are $50, and there are 5,000 bushels per contract. What is the customer's total gain or loss on this transaction?

A) $600 loss

B) $600 gain

C) $700 loss

D) $700 gain

3) A speculator bought three June copper futures (25,000 lbs. per contract) on February 10 at 80.20 cents/lb. As prices moved in his favor, the speculator decided to buy 2 more June copper futures contracts on February 20 at 81.00 cents/lb. The speculator offset all of his copper futures positions on May 5 when the June futures was trading at 81.80 cents/lb. If commissions were $30 per contract, how much did the speculator gain or lose on his copper futures trades?

A) $1,450 loss

B) $1,150 gain

C) $1,450 gain

D) $1,150 loss