1. The spot rate for Mexican pesos is MXN 12.52/USD. Quartzite Inc is a U.S.-based company. If Quartzite Inc. buys MXN 502,000 spot from its bank on Friday, how much must Quartzite pay?

		a. USD 40,095.85
		b. MXN 6,285,040.00
		c. USD 6,285,040.00
		d. MXN 40,095.85

2.

1. You decide to short seven July futures contracts of GBP 100,000 each. The spot rate is 0.72 GBP/USD, the 30-day forward rate is 0.70 GBP/USD, your expectation is 0.75 GBP/USD in July. If your expectation proves to be correct, how much profit or loss will you make?

   		a. USD -21,000
   		b. USD 21,000
   		c. GBP -21,000
   		d. GBP -21,000

3.

1. Is the following option ITM, ATM or OTM? And what are its payoff (or intrinsic value) and profit or loss, respectively? Long Put, premium CAD0.01, strike rate CAD/USD is 1.30, spot rate CAD/USD is 1.28.

   		a. ITM, CAD0.02, CAD0.01 profit
   		b. ATM, CAD0.01, CAD0.01 profit
   		c. OTM, CAD0.00, CAD0.01 loss
   		d. ITM, CAD0.01, CAD0.02 profit