Question
Draw a graph for a speculator that takes an appropriate futures position in euros from a US$ perspective based on her expectations. Assume the
Draw a graph for a speculator that takes an appropriate futures position in euros from a US$ perspective based on her expectations. Assume the current futures price is $1.10/, and she believes the spot price will be $1.08/ at expiration. Show on the graph and compute the gain/loss if the spot price is as expected. As a speculator, the position is uncovered to begin with. Calculate your anticipated profit/loss if you enter in to 3 contracts. Each contract is for EUR125,000.
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