JUNE FUTURES PRICE, S/Peso (BLUE) Daily Peso SPOT Price (RED) $0.0435 $0.0130 Apr. 20 $0.0425 50.0120 JUNE M PESO Futures Spot Price DATE Price by date Apr 8 $ 0.0413 $ 0.0416 Apr. 9 0.04198 0.0425 Apr. 10 0.0417 00422 Apr. 15 0.04122 0.0416 Apr 16 0.04093 0.0416 Apr. 17 0.04166 0.0421 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 0.0412 0.0421 Apr. 30 0.04133 May 1 0.04023 0.0406 May 4 0.04099 0,0415 May 0.04159 0.0416 May 6 0.04095 0.041 May 0.0413 0.0416 May 11 0.04158 0.0418 May 12 0.0411 0041 May 13 0.04083 0.0413 May 14 0.0414 0.0419 May 15 0.04148 0.0417 May 18 0.04196 0.0421 May 19 0.04177 0.04223 May 20 0.04317 0.04310 0.0414 $0.0415 $0.0410 my 50.0405 $0.0400 $0.0395 Apr. 10 Apr 15 Apr Apr May 2 Apr. 20 Agr. 29 Apr. 20 May 12 May 11 May May May 5 May 19 May 20 May May 15 May 14 May May 13 ANSWER FOR QUIZ ENTRY $ PROBLEM SET 2 19pts total Buying Pesos 1. It is now Apr.9. At SPOT, what is the total US$ value of 4 million pesos? Sell? or Buy? $ 2. Your US firm will be BUYING 4 m. Pesos on May 15 and will hedge using June Futures contracts against the US$ cost being higher then. Your firm will SELL?? Or BUY?? Futures 3. What is the total value of 4 m. Pesos at Apr.9 Futures contract Price? $ 4. It is now May 15. At SPOT, what is the total US$ value of 4 million pesos? Spot GAIN?? Spot LOSS?? $ 5. Buying the 4 m. Pesos at SPOT on May 15 (if did not hedge) versus Spot value on Apr.9 results in a GAIN?? OR LOSS?? in the Spot market for your US firm 6 Calculate the total SPOT S amount of GAIN?/LOSS? it did not hedge with Futures. Show GAIN as "S. LOSS as - 5 $ 7. What is the total value of 4 m. Pesos at the May 15 futures price? Fut. GAIN? Fut. LOSS? $ 8. A Futures hedge started on Apr.9, results in a futures GAIN?? OR LOSS?? as of May 15 9. If you started a Futures hedge on Apr.9, calculate the total S amount of Futures GAIN?/LOSS? as of May 15 Show GAIN as "S. LOSS as - 5 10. Calculate your total $ NET Gain?/Loss? by combining the May 15 Spot Gain?/Loss? with the May 15 Futures Gain?/Loss?. Show NET GAINOS + "$. LOSS OS - $ This is the net result for your firm from using Futures hedge for buying a m. Peso on May 15 GENERAL: A proper hedge will combine a Spot Goin with Futs Loss, or a Spot Loss with Futs Goin