Question 2 1 pts All of the following are terms (what needs to be spelled out) in a currency forward contract, EXCEPT: No exception, all of the listed are terms in a currency forward contract Which party can walk away from the contract Which foreign currency is being bought/sold How much of a foreign currency is being bought/sold What is the price per unit of foreign currency What is the delivery date of the contract Question 3 1 pts The British Pound is currently trading at $1.20. The market consensus (best guess) is that on December 15 it will most likely be trading at $1.30. The most likely current exercise/strike price for a British Pound call expiring on December 15 is $ 1.40 1.05 1.10 1.20 135 1.30 O 145 150 o 125 1.00 Question 4 1 p A non-deliverable forward contract is designed not be delivered at expiration, since its terms don't match the actual need. It is therefore, conceptually similar to a[n): Credit default swap European style put option American style call option American style put option Interest rate swap Futures contract European style call option Question 5 Metallgesellschaft's primary problem was: Not understanding you cannot hedge an exposure to futures by using put options Not understanding you cannot hedge an exposure to forwards by using call options Not understanding you cannot hedge an exposure to futures by using forwards Not understanding you cannot hedge an exposure to forwards by using put options Not understanding you cannot hedge an exposure to forwards by using futures Not understanding you cannot hedge an exposure to futures by using call options Question 6 1 pts Assume that one year ago, the spot rate of the British pound was $2.00. One year ago, the one-year futures contract of the British pound exhibited a discount of 2%. At that time, you sold futures contracts on pounds, representing a total of 1 million pounds. From one year ago to today, the pound's value depreciated against the dollar by 5%. Determine the total dollar amount of your profit or loss from your futures contract. (negative number indicates a loss) -20000 -40000 80000 20000 60000 -80000 100000 40000 100000 60000