2. 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 HWI_data.doc. Contract size is 12,500,000 yen. a. Describe the position you decide to enter (long or short). b. Describe the contract (what month, and what quantity). c. Document the gain or loss due to marking to market every day that your position is open. d. What is the total cost in USS after you have closed out your futures positions, and made your payment? e. What would have been the total cost in USS, if you had not hedged? Did you benefit from hedging? f. 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 HWI data.doc, Contract size is 62,500 British pounds. Japanese Yen Data British Pound Data for Japanese Yen FutuINAL D Wednesday OLED Change S t imated Prior Day Daily Seements for British Pound (FINAL DateWednesday 2 020 50 91130 Open High Low Last Change Settle timated You CNA . Datensyon2700 Settle stimated Prier Day Change LINALTrade Date Friday 01/17 La Chapelet med Pror Day Spot data Spor Data W /WD/ 24588622020/01/10 Tue 24568642020/01/15 2458842020/01/16 Thule 2450066 2020/01/17 r . S VO / 2458842020/01/14 1.10 4504642020/01/18 Wed 1.2004 SE 2020/01/10 Th 1.100 2020/01/17 2. 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 HWI_data.doc. Contract size is 12,500,000 yen. a. Describe the position you decide to enter (long or short). b. Describe the contract (what month, and what quantity). c. Document the gain or loss due to marking to market every day that your position is open. d. What is the total cost in USS after you have closed out your futures positions, and made your payment? e. What would have been the total cost in USS, if you had not hedged? Did you benefit from hedging? f. 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 HWI data.doc, Contract size is 62,500 British pounds. Japanese Yen Data British Pound Data for Japanese Yen FutuINAL D Wednesday OLED Change S t imated Prior Day Daily Seements for British Pound (FINAL DateWednesday 2 020 50 91130 Open High Low Last Change Settle timated You CNA . Datensyon2700 Settle stimated Prier Day Change LINALTrade Date Friday 01/17 La Chapelet med Pror Day Spot data Spor Data W /WD/ 24588622020/01/10 Tue 24568642020/01/15 2458842020/01/16 Thule 2450066 2020/01/17 r . S VO / 2458842020/01/14 1.10 4504642020/01/18 Wed 1.2004 SE 2020/01/10 Th 1.100 2020/01/17
