Question 1

It is early September and you decide to go explore Chile at the end of November (November 29^th to be exact). You budget that your Chile trip will cost 2,000,000 Chilean Peso (CLP). A futures contract for 2,000,000 Chilean Pesos is available with a maturity of November 29^th and a futures price of .

(a)Explain why you may want to enter into the futures contract. When you enter into the futures contract what are you agreeing to do?

U.S. Dollar/Chilean Peso (^USDCLP) 674.32 +0.58 (+0.09%) 18:24 CT [FOREX] 674.40 x N/A 675.40 x N/A INTERACTIVE CHART for Thu, Nov 29th, 2018 O Alerts # Watch @ Share ) Help ^USDCLP GO v +Study Tools Settings |1D 5D 1M 3M 6M 1Y 5Y 20Y Daily v 3M v Templates v Clear / = USD/CLP (^USDCLP) - Barchart.com 695.00 690.00 685.00 680 674.32 670.00 665.00 660.00 655.00 2500 Sep 3 Sep 10 Sep 17 Sep 24 Oct 1 Oct 8 Oct 15 Oct 22 Oct 29 Nov 5 Nov 12 Nov 19 Nov 26