Repeat steps a) e) assuming that you expect to receive a payment of 900,000 British pounds on close of business day, Friday, January 17th. Assume you that you enter into the futures position at a close of day on Tuesday, January 14th. Futures and spot data are provided in the file HW1_data.doc. Contract size is 62,500 British pounds.

1. 1. Describe the position you decide to enter (long or short).
2. 2. Describe the contract (what month, and what quantity).
3. 3. Document the gain or loss due to marking to market every day that your position is open.
4. 4. What is the total cost in US$ after you have closed out your futures positions, and made your payment?
5. 5. What would have been the total cost in US$, if you had not hedged? Did you benefit from hedging?

British Pound Data

Daily Settlements for British Pound Future (FINAL)Trade Date: Wednesday, 01/15/2020

Month	Open	High	Low	Last	Change	Settle	Estimated Volume	Prior Day Open Interest
FEB 20	1.3027	1.3054B	1.2999A	1.3050B	-.0001	1.3039	392	3,834
MAR 20	1.3045	1.3066	1.3007	1.3064	-.0001	1.3050	74,690	190,612
APR 20	-	1.3069B	1.3031A	1.3068B	+.0001	1.3063	270	520
MAY 20	-	1.3083B	1.3045A	1.3082B	UNCH	1.3077	258	0
JUN 20	1.3079	1.3101B	1.3049A	1.3100B	UNCH	1.3088	412	1,507
SEP 20	-	1.3123B	1.3094A	1.3123B	+.0003	1.3125	0	29

Daily Settlements for British Pound Futures (FINAL)Trade Date: Friday, 01/17/2020

Month	Open	High	Low	Last	Change	Settle	Estimated Volume	Prior Day Open Interest
FEB 20	1.3101	1.3129B	1.3019A	1.3019A	-.0050	1.3029	1,842	3,852
MAR 20	1.3097	1.3141	1.3026	1.3030	-.0050	1.3040	82,884	190,738
APR 20	-	1.3145B	1.3049A	1.3049A	-.0049	1.3053	86	708
MAY 20	1.3113	1.3159B	1.3064A	1.3064A	-.0049	1.3067	262	197
JUN 20	1.3135	1.3179B	1.3066	1.3067B	-.0049	1.3079	475	1,850
SEP 20	-	1.3204B	1.3116A	1.3116A	-.0049	1.3116	0	29

Spot Data:

Jul.Day	YYYY/MM/DD	Wdy	USD/GBP
2458863	2020/01/14	Tue	1.3011
2458864	2020/01/15	Wed	1.3024
2458865	2020/01/16	Thu	1.3063
2458866	2020/01/17	Fri	1.3028