Problem 8.3 Ventosa Investments Jamie Rodriguez, a currency trader for Chicago-based Ventosa Investments, uses the following futures quotes on the Britislh pound (E) to hedge on the value of the pound British Pound Futures, USS/pound Contract 62,500 pounds (Notional) Settle 1.4228 1.4162 Maturity Open 1.4246 1.4164 High 1.4268 1.4188 Low March 1.4214 June 1.4146 a. If Jaime buys 5 June pound futures, and the spot rate at maturity is $1.3980/E, what is the value of her position? b. If Jamie sells 12 March pound futures, and the spot rate at maturity is $1.4560/E, what is the value of her position? c. If Jamie buys 3 March pound futures, and the spot rate at maturity is $1.4560/, what is the value of her position? d. If Jamie sells 12 June pound futures, and the spot rate at maturity is $1.3980/E, what is the value of her position? Assumptions Pounds () per futures contract Maturity month Number of contracts Did she buy or sell the futures? a) Values 62,500 June b) Values 62,500 March c) Values 62,500 March d) Values 62,500 June 12 sells 12 buys $1.3980 $1.4162 buys $1.4560 $1.4228 sells Ending spot rate (S/) Pound futures contract, settle price (S/E) $1.4560 $1.3980 $1.4228 $1.4162 HINT: Value of position = buys: Notional x (Spot-Futures) x #of contracts sells: Notional x (Spot-Futures) x #of contracts