JUNE FUTURES PRICE, $/Peso (Black line) Daily Peso SPOT Price (RED Dash) $0.0435 $0.0430 $0.0425 $0.0020 JUNE Mx PESO Futures Spot Price DATE Price by date Apr. 8 $ 0.0413 $0.0416 Apr. 9 0.04198 0.0425 Apr. 10 0.0417 0.0422 Apr. 15 0.04122 0.0416 Agr. 16 0.04093 0.0416 Apr. 17 0.04166 0.0421 Apr. 20 0.04096 0.0416 Apr. 21 0.04046 0.041 Apr. 22 0.04034 0.0409 Apr. 24 0.03959 0.04002 Apr. 27 0.04003 0.0405 Apr. 28 0.04088 0.0412 Apr. 29 0.0417 0.0421 Apr. 30 0.04133 0.0414 May. 1 0.04023 0.0406 Maya 0.04099 0.0415 Mays 0.04159 0.0416 May. 0.04095 0.041 May 2 0.0413 0.0416 Mav.lt 0.04158 0.0418 May 12 0.0411 0.041 May 13 0.04083 0.0413 May 14 0.0414 0.0419 May 15 0.04148 0.0417 May. 18 0.04196 0.0421 M19 0.04172 0.04223 May 20 0.04317 0.04310 $0.0415 $0.0410 Un $0.00 $0.0400 LLLLLLLLL A. Apr. Apr. 10 Apr. 15 Apr. 16 Ape 17 Apr. 20 Ar. 21 Apr. 22 Apr. 24 Apr 27 Apt. 28 Apr 29 Apr.) May 1 May Mays May May May 11 May 12 May 13 Mwy.14 Muy.15 May. 16 May 19 May 20 50.0395 Fin4420 Part-2 AT-HOME 50pts ENTER ANSWERS IN QUIZ Oct.28-29 NAME 3 Problemn Pages INDIVIDUAL EFFORT-NO SHARING ANSWERS USE PESO JUNE FUTURES DATA PROVIDED with these At-Home problems ANSWER FOR PROBLEM SET 1 18 pts total SELLING Pesos QUIZ ENTRY 1. It's now Apr.16. At SPOT, what's the total US$ value of 10 million pesos? 1.1 1.2 2. Your US firm will be selling 10 m. Pesos on May 20 but will hedge using June Futures contracts to hedge the risk of the USS value being lower then QUES: Your firm will SELL?? Or BUY?? Futures contracts 3. What is the total value of 10 m. Pesos at Apr.16 Futures.contract Price? 1.3 1.4 4. It is now May 20. At SPOT what is the total US$ value of 10 million pesos? 1.5 5. Selling the 10 m. Pesos at SPOT on May 20 (if did not hedge) versus Spot value on Apr 16 results in a GAIN?? OR LOSS?? in the Spot market for your US firm, 6 Refer to #5. Calculate the total SPOT S amount of GAIN? OSS? It did not heder with Futures Show GAIN +$. LOSS os -$ 1.6 1.7 7. What is the total value of 10 m. Pesos at the May 20 futures price? 8. A Futures hedge started on Apr.16, AS QE Max. 20 results in a Futures GAIN?? OR LOSS?? 1.8 9. If you hedged with Futures on Apt. 16. calculate the total amount of Eutures GAIN?/LOSS? as of May 20. Show GAIN. S. LOSS -s - 5 1.9 1.10 10. Calculate your total S NET Gain?/Loss? by combining the May 20 Spot Gain/oss? with the May 20 Futures Gain?/Loss? Show GANSLOSS * This is the net result for your firm from using Futures hedge for 30 m. Peso on Apr 16 SEE PAGE 2 FOR PROBLEM # 2 Fin4420 Part-2 AT-HOME SOpts ENTER ANSWERS IN QUEZ Oct.28-29 NAME INDIVIDUAL EFFORT - NO SHARING ANSWERS GENERAL FUTURES PROBLEMS BELOW - NOT USING DATA SHEET 3.1 4.5 pts 1. You open your futures position by BUYING futures contracts on 10 million Pesos when the June contract price is $0.0415 / Peso. Weeks later when you sell-to-close your entire futures position, the contract price is $0.0430/Peso. Enter the total amount Futures GAIN?? or LOSS?? Show GAIN as **$*, Lossas + $ 3.2 4.5 pts 2. You open your futures position by SELLING futures contracts on 10 million pesos when the June contract price is $0.0412 / Peso. Weeks later when you buy-to-close your entire futures position, the contract price is $0.0432/Peso. Enter the total amount Futures GAIN?? or LOSS?? Show GAIN as * +$", LOSS as --S 3.3 2.5pts TRUE or FALSE 3. When you opened your futures position the June contract price was $0.0440/Peso. When you closed your futures position the price was $0.0420/Peso. If initially to start you bought the futures contract, you would have a GAIN 3.4 2.5pts TRUE or FALSE 4. When you opened your futures position the June contract price was $0.0435/Peso. When you closed your futures position the price was $0.0420/Peso, If initially to start you sold the futures contract, you would have a GAIN. ANSWER FOR QUIZ ENTRY PROBLEM 12 18pts total BUYING Pesos 1. It is now APR.15. At SPOL what is the total US$ value of 10 million Pesos? 2.1 2.2 2. Your US firm will be BUYING 10 m. Pesos on May 19 and will hedge currency risk by using June Futures contracts against the US$ cost being rising, QUES: Your firm will SELL??? Or BUY??? Futures contracts 3. What is the total value of 10m. Pesos at Apr.15 Futures contract Price? 2.3 2.4 4. It is now May 19. At SPOT, what is the total US$ value of 10 million Pesos? 2.5 5. Buying the 10 m. Pesos at SPOT on May 19 (if did not hedge) versus Spot value on Apr.15 results in a GAIN?? OR LOSS?? in the Spot market for your US firm. 2.6 6 Calculate the total SPOT $ amount of GAIN?/LOSS? I did not hedge with Futures. Show GAIN as "$", LOSS oss 2.7 7. What is the total 5 value of 10 m. Pesos at the May 19 futures price? 2.8 a 8. A Futures hedge started on Apr.15, results in a futures GAIN?? or LOSS?? as of May 19 2.9 9. If you started a Futures hedge on Apr 15 calculate the total amount of Futures GAIN?/LO557 as of May 19. Show GAINS +5 LOSS as - 2.10 10. Calculate your total $ NET Gain?/Loss? by combining the Mgy 19 Spot Gain?/LOSS? with the May 19 Futures Gain?/Loss?. Show GAIN +$ LOSS os * -5 This as the net result for your firm from using Futures hedge for 10 m. Peso on Apr. 15 TOTAL Problem #1 #2 = 36 PTS PAGE 3 Next short Problem section = 14 pts. will be short Futures Problems JUNE FUTURES PRICE, $/Peso (Black line) Daily Peso SPOT Price (RED Dash) $0.0435 $0.0430 $0.0425 $0.0020 JUNE Mx PESO Futures Spot Price DATE Price by date Apr. 8 $ 0.0413 $0.0416 Apr. 9 0.04198 0.0425 Apr. 10 0.0417 0.0422 Apr. 15 0.04122 0.0416 Agr. 16 0.04093 0.0416 Apr. 17 0.04166 0.0421 Apr. 20 0.04096 0.0416 Apr. 21 0.04046 0.041 Apr. 22 0.04034 0.0409 Apr. 24 0.03959 0.04002 Apr. 27 0.04003 0.0405 Apr. 28 0.04088 0.0412 Apr. 29 0.0417 0.0421 Apr. 30 0.04133 0.0414 May. 1 0.04023 0.0406 Maya 0.04099 0.0415 Mays 0.04159 0.0416 May. 0.04095 0.041 May 2 0.0413 0.0416 Mav.lt 0.04158 0.0418 May 12 0.0411 0.041 May 13 0.04083 0.0413 May 14 0.0414 0.0419 May 15 0.04148 0.0417 May. 18 0.04196 0.0421 M19 0.04172 0.04223 May 20 0.04317 0.04310 $0.0415 $0.0410 Un $0.00 $0.0400 LLLLLLLLL A. Apr. Apr. 10 Apr. 15 Apr. 16 Ape 17 Apr. 20 Ar. 21 Apr. 22 Apr. 24 Apr 27 Apt. 28 Apr 29 Apr.) May 1 May Mays May May May 11 May 12 May 13 Mwy.14 Muy.15 May. 16 May 19 May 20 50.0395 Fin4420 Part-2 AT-HOME 50pts ENTER ANSWERS IN QUIZ Oct.28-29 NAME 3 Problemn Pages INDIVIDUAL EFFORT-NO SHARING ANSWERS USE PESO JUNE FUTURES DATA PROVIDED with these At-Home problems ANSWER FOR PROBLEM SET 1 18 pts total SELLING Pesos QUIZ ENTRY 1. It's now Apr.16. At SPOT, what's the total US$ value of 10 million pesos? 1.1 1.2 2. Your US firm will be selling 10 m. Pesos on May 20 but will hedge using June Futures contracts to hedge the risk of the USS value being lower then QUES: Your firm will SELL?? Or BUY?? Futures contracts 3. What is the total value of 10 m. Pesos at Apr.16 Futures.contract Price? 1.3 1.4 4. It is now May 20. At SPOT what is the total US$ value of 10 million pesos? 1.5 5. Selling the 10 m. Pesos at SPOT on May 20 (if did not hedge) versus Spot value on Apr 16 results in a GAIN?? OR LOSS?? in the Spot market for your US firm, 6 Refer to #5. Calculate the total SPOT S amount of GAIN? OSS? It did not heder with Futures Show GAIN +$. LOSS os -$ 1.6 1.7 7. What is the total value of 10 m. Pesos at the May 20 futures price? 8. A Futures hedge started on Apr.16, AS QE Max. 20 results in a Futures GAIN?? OR LOSS?? 1.8 9. If you hedged with Futures on Apt. 16. calculate the total amount of Eutures GAIN?/LOSS? as of May 20. Show GAIN. S. LOSS -s - 5 1.9 1.10 10. Calculate your total S NET Gain?/Loss? by combining the May 20 Spot Gain/oss? with the May 20 Futures Gain?/Loss? Show GANSLOSS * This is the net result for your firm from using Futures hedge for 30 m. Peso on Apr 16 SEE PAGE 2 FOR PROBLEM # 2 Fin4420 Part-2 AT-HOME SOpts ENTER ANSWERS IN QUEZ Oct.28-29 NAME INDIVIDUAL EFFORT - NO SHARING ANSWERS GENERAL FUTURES PROBLEMS BELOW - NOT USING DATA SHEET 3.1 4.5 pts 1. You open your futures position by BUYING futures contracts on 10 million Pesos when the June contract price is $0.0415 / Peso. Weeks later when you sell-to-close your entire futures position, the contract price is $0.0430/Peso. Enter the total amount Futures GAIN?? or LOSS?? Show GAIN as **$*, Lossas + $ 3.2 4.5 pts 2. You open your futures position by SELLING futures contracts on 10 million pesos when the June contract price is $0.0412 / Peso. Weeks later when you buy-to-close your entire futures position, the contract price is $0.0432/Peso. Enter the total amount Futures GAIN?? or LOSS?? Show GAIN as * +$", LOSS as --S 3.3 2.5pts TRUE or FALSE 3. When you opened your futures position the June contract price was $0.0440/Peso. When you closed your futures position the price was $0.0420/Peso. If initially to start you bought the futures contract, you would have a GAIN 3.4 2.5pts TRUE or FALSE 4. When you opened your futures position the June contract price was $0.0435/Peso. When you closed your futures position the price was $0.0420/Peso, If initially to start you sold the futures contract, you would have a GAIN. ANSWER FOR QUIZ ENTRY PROBLEM 12 18pts total BUYING Pesos 1. It is now APR.15. At SPOL what is the total US$ value of 10 million Pesos? 2.1 2.2 2. Your US firm will be BUYING 10 m. Pesos on May 19 and will hedge currency risk by using June Futures contracts against the US$ cost being rising, QUES: Your firm will SELL??? Or BUY??? Futures contracts 3. What is the total value of 10m. Pesos at Apr.15 Futures contract Price? 2.3 2.4 4. It is now May 19. At SPOT, what is the total US$ value of 10 million Pesos? 2.5 5. Buying the 10 m. Pesos at SPOT on May 19 (if did not hedge) versus Spot value on Apr.15 results in a GAIN?? OR LOSS?? in the Spot market for your US firm. 2.6 6 Calculate the total SPOT $ amount of GAIN?/LOSS? I did not hedge with Futures. Show GAIN as "$", LOSS oss 2.7 7. What is the total 5 value of 10 m. Pesos at the May 19 futures price? 2.8 a 8. A Futures hedge started on Apr.15, results in a futures GAIN?? or LOSS?? as of May 19 2.9 9. If you started a Futures hedge on Apr 15 calculate the total amount of Futures GAIN?/LO557 as of May 19. Show GAINS +5 LOSS as - 2.10 10. Calculate your total $ NET Gain?/Loss? by combining the Mgy 19 Spot Gain?/LOSS? with the May 19 Futures Gain?/Loss?. Show GAIN +$ LOSS os * -5 This as the net result for your firm from using Futures hedge for 10 m. Peso on Apr. 15 TOTAL Problem #1 #2 = 36 PTS PAGE 3 Next short Problem section = 14 pts. will be short Futures Problems