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Assume that on March 1, the spot rate of the Euro was $1.41 and the price on an April futures contract was $1.43. Assume that
Assume that on March 1, the spot rate of the Euro was $1.41 and the price on an April futures contract was $1.43. Assume that the Euro appreciated during March so that by March 31 it was worth $1.49. a. What do you think happened to the futures price over the month of March? Why? b. If you had known that this would occur, would you have purchased or sold an April futures contract in pounds on March 1? Explain.
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