FNCE 4 D2L Grades Mic X Course Cross H M Inbox ( G book v S TForce Valuation filled A & filled A y! mru we G Google G Google G ebitda D2L Fin440 + V X > C a learn.mru.ca/content/enforced/17146-40937.202204/csfiles/home_dir/courses/11065.202001/FNCE4408-SAMPLE%20FINAL%20EXAM(1).pdf?_&d21SessionVal=yKP65fiknHpvySRDmp... @ Update Microsoft Word - FNCE4408-SAMPLE FINAL EXAM.docx 5 / 8 86% + Section 2: Answer Each Question within the Space Provided. Be sure to clearly show your reasoning, calculations and answers. Question 1 On January 2, a Canadian automobile dealer decided to import 1500 cars from Japan at a cost of 2.5 million Yen per car. The cars will arrive on April 30 at which time payment for the cars will be due. The dealer also decided to use June forward contracts (maturing June 30) to hedge the CAD/YEN exchange rate. On January 2, the June forward rate was $0.010835 2 and on April 30, when the hedge is closed out, the spot rate for the Yen was $0.01102. If the interest rate in Canada is 5% and in Japan is 1%, determine how many contracts the dealer used to hedge and what the effective amount was that the dealer paid in Canadian dollars (Assume the contract size for the forward contract is 12,500,000 Yen). (7 points) 3 Question 2 Alan "bought" a futures contract on a commodity on the New York Commodity Exchange on June 1. The futures price was USD 500 per unit and the contract size was 100 units per contract. Alan set up a margin account with initial margin of USD 2,000 per contract and maintenance margin of USD 1000 per contract. The futures price of the commodity varied as shown below. Fill in the table below and therefore determine the balance in Alan's margin account at the end 4 of June 5 (6 points Futures Daily Cum Margin Margin Variation Day End Price $ Gain/Loss Gain/Loss Acct Bal. Call ? Margin 492.70 June 1 497.30 June 2 492.70 June 3 484.20 June 4 471.70 June 5 468.80 5 - 13 . C Clear Search - B - L Ugg P 34 W X ENG 4:32 PM US 2022-12-18 49