INTERNATIONAL FINANCE (FIN 370) HOMEWORK SET # III (A) FOREIGN CURRENCY FUTURES The three-month futures price for the British pound is $1.2870/. You expect the spot price three months from today to be $1.2520/. The British pound futures contract size is 62,500. a. If you are a speculator would you buy the futures contracts or sell them. Explain your answer. b. How much profit would you make if you trade 45 contracts and your expectations come true? c. If you were a MNC with A/P accounts payables) of 12 million due in three months, would you buy or sell the pound futures. Explain your answer. d. How many contracts would you be able buy or sell? How much would be your pound A/P worth in dollars