Please help we these questions with detail calculations and is used with Excel, a copy of Excel as well.

Week 2: Individual Assignment (Problem Solving) This is an individual assignment and will be graded. Each student must submit his/her own copy of the assignment and must answer all 4 questions. Please type your answers immediately below each question. Show all necessary formulas and workings. Submit your assignment via the drop box designated. 1. You sold 5 contracts of September Euro () futures at 1.15$/ on June 1. Each contract of futures is 125,000. The contract is marking to market on a daily basis as the price changes. a) If the exchange rate falls to 1.12$/ the next day on June 2, what is your cash flow at the end of business on the next day? (Please clearly indicate cash inflow or outflow and the exact amount.) b) If the exchange rate rebounds to 1.16$/ on June 3, how much will you receive that day? (Please clearly indicate cash inflow or outflow and the exact amount.) c) What is your net gain/loss if you decide to close your position on June 3? 2. 3. On March 1, you bought 1 contract of gold futures (100 oz) at $1,210 per ounce. The agreement is good for any day up to March 21. Throughout that period, the price of gold hit a low of $1,160 and hit a high of $1,280. The price settled on March 21 at $1,180, and on March 21, you settled your futures agreement at that price. Did you gain or lose? By how much? You are examining the financial viability of investing in some abandoned copper mines in Chile, which still have significant copper deposits. A geologist survey suggests that there might still be 10 million pounds of copper in the mines and the cost of opening up the mines will be $2 million. The Chilean government is willing to grant a 25-year lease on the mine. At the current copper price, the present value of the net cash flows from this mine is $1.8m. However, the annualized standard 1 deviation in copper prices is 25%, and the risk free rate is 7%. Estimate the value of right to the mine based on an option-pricing model. 4. Alpha company can borrow at a fixed rate of 11% and a floating rate of Prime + 20 basis points. Beta company can borrow at a fixed rate of 11.8% and a floating rate of Prime + 50 basis points. Alpha prefers to borrow floating rate loan while Beta prefers to borrow fixed rate loan. a. If there is no middle party involved, what is the total saving that can be shared between Alpha and Beta if they carry out a swap arrangement? b. If the swap arrangement involves Alpha paying Beta (Prime + 20 b.p.) in exchange for a fixed rate of 11.3%, i) ii) iii) what is the cost of borrowing floating rate loan for Alpha after the swap? what is the cost of borrowing fixed rate loan for Beta after the swap? what are the cost savings for Alpha and Beta after the swap? 2