Q5. On NOV 15, 2018 a multinomial US firm expects a cash flow of EUR2,516,583.75 (from a project in France) by the end of the quarter, MAR 31, 2019. The firm decides to exchange the euros into USD and deposit the US dollars in the firm's NYC account as soon as the Euros are received form the project. It also decides to hedge its exchange rate risk using the JUN 2019 EUR futures. The NOV 15, 2018 spot exchange rate is: S = USD1.18455/EUR and the JUN 2019 Futures exchange rate is F_{10.15.2018; 6.19}= USD1.17675/EUR.

One EUR futures is for EUR125,000.

5.1 Use a timetable to describe the spot and futures hedge positions on NOV 15, 2018.

5.2 Use the same timetable to show how the US firm closes its positions on MAR 31, 2019 when the spot exchange rate is S = USD 1.2000/EUR

and the JUN 2019 futures exchange rate is F_{3,31,2019; 6.2019} = USD1.19850/EUR.Also, calculate the total USD amount deposited by the firm in

it's NYC account.