PLEASE SHOW WORK!

1. A futures contract is available on Swiss francs (SF). A hedger buys TWO March contracts. The futures price is $0.645/SF. Each contract is for 125,000 Swiss francs. In February, a month later, the contracts are sold. The futures price at this time is $0.6575/SF. What is the futures gain or loss?

A loss of $3,125.00

A loss of $31,250.00

A gain of $312.50

A gain of $3,125.00

The spot exchange rate of Canadian dollars (C$) for 1 USD is quoted as $0.72USD/C$. What is the quote in terms of the Canadian dollar?

1.18C$/USD

1.39C$/USD

$0.72/C$

13.90C$/USD

None of the above is correct

You are evaluating investments in U.S. equities and Mexican equities. Your stock analysts anticipate that U.S. equities will appreciate 9% over the next year. Mexican equities are expected to rise by 15%. Your foreign exchange analyst expects the exchange rate for Mexican pesos, MP, to change from $0.14286/MP to $0.142015/MP. In U.S. dollar terms, what rate of return do you expect to earn on your Mexican equity investment?

14.32%

11.43%

10.25%

None of the above