plan to buy 1,000 Shares of Swiss International Airlines stock. The current price is SF950. The current exchange rate is $0.7254/SF. are interested in speculating on the stock but do not want to assume any currency risk. plan to hold the position for six months. The appropriate futures contract currently is trading at $0.7250/SF. Construct a hedge and evaluate how is investment will do if in six months the stock is at SF926.50, the spot exchange rate is $0.7301, and the futures price is $0.7295. The Swiss franc futures contract size is SF125,000. Determine the overall prot from the transaction. Then break down the prot into the amount earned solely from the performance of the stock, the loss or gain from the currency change while holding the stock, and the loss or gain on the futures transaction.

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