g) Draw a graph that displays the expected profit/loss of your hedged position (i.e. your combined...
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g) Draw a graph that displays the expected profit/loss of your hedged position (i.e. your combined spot and futures position, based on the hedging strategy you recommended in question e (using futures). What is the total profit/loss in US$ you would realize under that strategy if the Swiss Franc spot and futures prices decline by 10% until October 28? Assume that there is no basis risk, i.e., that spot and futures prices move in tandem. (2 Points) Answer: g) Draw a graph that displays the expected profit/loss of your hedged position (i.e. your combined spot and futures position, based on the hedging strategy you recommended in question e (using futures). What is the total profit/loss in US$ you would realize under that strategy if the Swiss Franc spot and futures prices decline by 10% until October 28? Assume that there is no basis risk, i.e., that spot and futures prices move in tandem. (2 Points) Answer:
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