Below are some quotes for Mexican Peso futures traded on CME; quotes are in $ per MXN.

Maturity Open High Low Settle Lifetime High Lifetime Low

Mar 0.10953 0.10988 0.10930 0.10958 0.11000 0.09770

Sept 0.10615 0.10615 0.10610 0.10573 0.10615 0.09930

All contracts are for 500,000 Mexican pesos.

a.With a current spot exchange rate of $0.10988 per MXN, if you believe that MXN is going to depreciate against the USD by next March, what would you do to speculate?

b. Assume you did what you answered in a. with the listed settle price, if the futures price moves to $0.11111 per MXN and the spot exchange rate moves to $0.10975 per MXN one month after the position was opened, what is the gain or loss per contract on this position? Draw a graph and mark key points to illustrate.