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Amidst the uncertainty surrounding the fate of the Brexit deal, the sterling swung within a wide trading range as seen in the rates between 25

Amidst the uncertainty surrounding the fate of the Brexit deal, the sterling swung within a wide trading range as seen in the rates between 25 January 2019 and 19 April 2019 in the table below.

Bank dealer X performed a number of foreign currency trades on the British pounds against the US dollar during this period. She trades standard contracts (size USD100,000) with a leverage ratio of 1:200. The online broker takes a 8-pip spread on either side of the spot mid-rate. These were the dealers trades:

25 Jan 2019 to

19 Apr 2019

US dollars per GBP

(Spot, mid-rates)

Trades

T = 0 (25 Jan 2019)

1.3190

Buy 5 contracts

T = 1

1.2810

Sell 8 contracts

T = 2

1.3310

Buy 4 contracts

T = 3

1.3020

Sell 6 contracts

T = 4 (19 April 2019)

1.2990

Buy 5 contracts

Required:

a. Calculate the bank dealers net profit/loss after executing all her trades. Ignore margin considerations and other transaction costs (apart from the bid-offer spread).

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