Question 1 It is early September and you decide to go explore Chile at the end of November (November 29th 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 29th and a futures price of Fo = 665 CLP/USD. (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 (AUSDCLP) 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 Alerts Watch Templates Share Clear Help E AUSDCLP GO W Study Tools Settings 1D 5D 1M 3M 6M 1Y SY 20Y Daily 3M USD/CLP (AUSDCLP) - Barchart.com 695.00 690.00 685.00 680.00 67432 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 (b) Consider the evolution of the CLP/USD exchange rate above. Did you make or lose money on the futures contract? How much? With the benefit of hindsight was it advantageous to enter into the futures contract? Discuss. (c) Your plan changes and you instead embark on your trip on October 1. How can you exit the futures contract? How much money did you make (lose) on the futures contract? Was it advantageous to have entered into the futures contract? (d) Your buddy says you should avoid the futures contract due to counterparty risk. Do you agree? Explain why or why not