Assuming that you expect a payment of 900,000 British pounds on close of business day, Friday, September 8th. Assume you that you enter into the futures position at a close of day on Tuesday, September 5th. Futures and spot data are provided in the chart. Contract size is 62,500 British pounds.

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 US$ after you have closed out your futures positions, and made your payment?

E. What would have been the total cost in US$, if you had not hedged? Did you benefit from hedging?

British Pound Data Daily Settlements for British Pound Future Date: W 09/06/2017 Month OpenHighLoLast Change Settle Estimated Prior Day Open Interest Volume SEP 17 1.3042 .3088 30241.30480002 1.3045 101,945212,151 OCT i 1.30 309 .3037 A 1063A -.000-3058 NOV .301 3110 .3048. 1074A -0002 3069 DEC 17 1.3085 1.3125306230870002 1.308310,904 JAN 18 MAR 18 49 532 5,766 1.3117B 1.3082A 3117B00021.3095 1.3156B 1.3108A 1.3128A -.0002 1.3125 343 Daily Settlements for British Pound Futures Date: Friday, 09/08/2017 Change Settle Estimatedl Prior Day Open Interest Volume SEP 17 .3102 1.3227 1.3098 1.3193t0116 1.3203 138,217200,95'7 OCT 171.31191.3239B 1.3118 1.3215A 50116 1.3216 163 NOV 171.31651.3249B 1.3152A 1.3226A 50116 1.3227 DECI 140 3265| .31 36A .3234 0115 32 21.688 513 211 15,507 29 181.3206B 1.3206B 0116 1.3252 MAR 18 1.32311.3298B 1.3231 1.3283A| +0115 1.3281 343 Spot Data: 2458002 2017/09/05 Tue 1.3009 2458003 2017/09/06 Red 1.3053 2458004 2017/09/07 Thu1.3088 2458005 2017/09/08 Fri 1.3200