. Assume todays settlement price on a Chicago Mercantile Exchange EUR (euro) futures contract is $.1575/MXN. You BUY a futures contract to hedge an exposure to MXN10,000,000 payable. Your initial margin account balance is $40,000. The next three days settlement prices are $.1579/MXN, $.1571/MXN, and $.1562/MXN. Calculate the changes in the margin account (and the new balances) from daily marking-to-market adjustments over the next three days. The contract size is 10,000,000 Mexican Pesos. DAY 0 MB = $

DAY 1 = MB = $

DAY 2 = MB = $

DAY 3 = MB = $

5. A U.S. firm expects receivables of 500,000 in three months. The U.S. firm purchases a put option on the euros. The strike price is $1.25/ and the premium is $.03/. What is the total dollar amount received from the euro receivable if the spot rate in three months is (Multiply any $/ amount by 500,000)

$1.10/

$1.18/

$1.30/

$1.40/