Question $20$

A currency speculator expects the spot rate of Euros to change from $$1\mathrm{.}00$ to $$0\mathrm{.}95$ in one year Assume the speculator has access to credit lines of $$10,000,000$ in the US and EUR $10,000,000$ in Europe. The annual borrowing and lending rates are $8\%$ in US and $6\%$ in Europe. Suppose everyone in the FX market followed the correct speculatulation strategy, then in the FX market the demand schedule for euro will $($BLANK$),$ the supply schedule for euro will $($BLANK$),$ and price of euro will $($BLANK$).$

decrease, increase, decrease

not change, increase, decrease

increase, not change, increase

decrease, not change, decrease

increase, decrease, increase

Question $21$

$2\mathrm{.}5$ pts

Please answer the next question based on the closing July futures contract prices for Swiss francs $($CHF$)$ for three consecutive days in April $20$XX$.$ Each contract requires the delivery of $CHF125,000.$ The initial and maintenance margin per contract are $$2,500,$ and $$2,000,$ respectively. You sell two CHF futures contract on $\frac{4}{01}.$

$\backslash$table$[[$Date$,\frac{4}{01},\frac{4}{02},\frac{4}{03}$