Question 5 (1 point) Two parties agree to a currency forward contract for 1 million at $1.17 per euro. At contract expiration, the euros trade at $1.15 per euro. In a cash-settlement forward contract, the: Oshort pays the long $1.15 million and receives 1 million from the long. Oshort pays the long $0.02 million. Olong pays the short $1.15 million and receives 1 million from the short. long pays the short $0.02 million. long pays the short $1.17 million and receives 1 million from the short. Question 6 (1 point) If you expect the British pound to depreciate, for speculative purposes, your best strategy would be: Buy a pound call Buy a pound put Sell a pound put Question 7 (2 points) Consider a 125,000 euro futures contract in which the current future price is $1.078 per euro. The current initial margin requirement is $2,365 per contract, and the maintenance margin requirement is $2,150 per contract. You go long 1 contract and meet all margin calls but do not withdraw any excess margin. Assume that on the first day, the contract is established at the settlement price, so there is no mark-to- market gain or loss on that day. Complete the table below. In your answer, write A-$..., B-... or alternatively, paste the complete table in your answer. Day Required Deposit S2,365 Beg Balance Settle Price Daily Change Gain Loss Ending Balance 0 (Purchase) $1.078 $2,365 A B $1.077 D E 2 F $1.070 3 K L $1.078 M N O Format B IV - Question 8 (1 point) Compared to forward contracts, futures contracts are least likely to be: less subject to default risk. larger in size. standardized. Question 9 (1 point) In your opinion, what advantage do currency options offer that are not available with futures or forward contracts? Paragraph BIU