Part 1. Using the quotations and contract size in the above Exhibit 7.3. You believe the spot price in September will be $0.9853 per AUD, (Note: the September 2013 Australian dollar futures contract has a price of $0.9458 per AUD).

A) What speculative position (long or short) would you enter into to attempt to profit from your beliefs? Explain rational.

B) Calculate your anticipated profits, assuming you take the speculative position in two contracts.

C) What is the size of your profit (loss) if the futures price (not your belief) is indeed an unbiased predictor of the future spot price and this price materializes?

Part 2. Do part 1 parts A, B & C again assuming you instead believe the September 2013 spot price will be $0.9176 per AUD.

A) What speculative position (long or short) would you enter into to attempt to profit from your beliefs? Explain rational.

B) Calculate your anticipated profits, assuming you take the speculative position in two contracts.

C) What is the size of your profit (loss) if the futures price (not your belief) is indeed an unbiased predictor of the future spot price and this price materializes?

Settle Change Open interest 1.0078 1.0083 .0082 .0082 205.277 13,577 9660 9639 -.0001 -.0001 127.773 11,002 1.5401 1.5392 .0097 .0097 204.470 5.434 1.0620 1.0630 .0060 .0060 60,342 4,207 Open Hieh Low Currency Futures Japanese Yen (CME)-V12,500,000: S per 100% June 9998 1.0105 .9954 Sept 1.0001 1.0110 .9959 Canadian Dollar (CME) CAD 100,000; S per CAD June .9667 .9681 .9631 Sept 9650 .9658 9611 British Pound (CME)-62,500; S per June 1.5312 1.5409 1.5290 Sept 1.5295 1.5400 1.5283 Swiss Franc (CME)-CHF 125,000; S per CHF June 1.0563 1.0649 1.0534 Sept 1.0567 1.0659 1.0550 Australian Dollar (CME)-AUD 100,000: S per AUD June .9640 .9650 9503 Sept .9577 .9587 9443 Mexican Peso (CME)-MXN 500,000: S per MXN June .07853 07883 07763 Sept .07793 .07818 .07705 Euro (CME)-125,000: S per June 1.3084 1.3118 1.3054 Sept 1.3089 1.3126 1.3062 Euro/Japanese Yen (ICE-US)-125,000; V per June Sept Euro/British Pound (ICE-US) 125,000: per e June Sept Euro/Swiss Franc (ICE-US) 125,000; CHF per June Sept .9517 9458 -.0110 -.0108 181,224 30,867 07770 ,07713 -00067 -.00067 113,738 11,721 1.3087 1.3094 .0005 .0005 223,380 16,814 129.85 129.85 -1.02 -1.03 8,204 123 85015 85115 -00465 .00460 13,517 174 1.2337 1.2332 -.0051 -.0051 13,611 371 Settle Change Open interest 1.0078 1.0083 .0082 .0082 205.277 13,577 9660 9639 -.0001 -.0001 127.773 11,002 1.5401 1.5392 .0097 .0097 204.470 5.434 1.0620 1.0630 .0060 .0060 60,342 4,207 Open Hieh Low Currency Futures Japanese Yen (CME)-V12,500,000: S per 100% June 9998 1.0105 .9954 Sept 1.0001 1.0110 .9959 Canadian Dollar (CME) CAD 100,000; S per CAD June .9667 .9681 .9631 Sept 9650 .9658 9611 British Pound (CME)-62,500; S per June 1.5312 1.5409 1.5290 Sept 1.5295 1.5400 1.5283 Swiss Franc (CME)-CHF 125,000; S per CHF June 1.0563 1.0649 1.0534 Sept 1.0567 1.0659 1.0550 Australian Dollar (CME)-AUD 100,000: S per AUD June .9640 .9650 9503 Sept .9577 .9587 9443 Mexican Peso (CME)-MXN 500,000: S per MXN June .07853 07883 07763 Sept .07793 .07818 .07705 Euro (CME)-125,000: S per June 1.3084 1.3118 1.3054 Sept 1.3089 1.3126 1.3062 Euro/Japanese Yen (ICE-US)-125,000; V per June Sept Euro/British Pound (ICE-US) 125,000: per e June Sept Euro/Swiss Franc (ICE-US) 125,000; CHF per June Sept .9517 9458 -.0110 -.0108 181,224 30,867 07770 ,07713 -00067 -.00067 113,738 11,721 1.3087 1.3094 .0005 .0005 223,380 16,814 129.85 129.85 -1.02 -1.03 8,204 123 85015 85115 -00465 .00460 13,517 174 1.2337 1.2332 -.0051 -.0051 13,611 371