Q$3.$ A firm in Luxembourg makes fine crystal. On August $28,$ it has shipped an order worth $$2$ million USD

to a US customer. The payment is due three months from shipping date. The spot LUFr$/$S $($price of LUFr in

S terms$)$ rate is $32\mathrm{.}6500$ and the $3$ month forward is $32\mathrm{.}6340.$ The spot DEM$/$S rate is $1\mathrm{.}6050$ and December

futures are trading at $0\mathrm{.}6310$ S$/$DEM$.$ LUFr spot is pegged to the DEM spot. The firm hedges exposure using

S$/$DEM futures. On November $28,$ price of the futures is $0\mathrm{.}6295$ S$/$DEM and LUFr$/$$ spot is $32\mathrm{.}5225.$ What is

the position in futures and what are the gains and losses? $($showcase th formular and the calculation used $)$