Soledad McArthur is the chief currency trader at the Magna Carta macro hedge fund. She decides on January 15 to go long by buying Mexican peso (MXN) March and June futures contracts currently trading at US$0.11953 and US$0.11790, respectively.

1. Assuming that the initial margin is set at 12.5 percent of the face value of the contract, what is the amount that Soledad has to deposit in the margin account (each contract has a face value of MXN 500,000)?

2. If Soledad held the March futures to maturity and the spot exchange rate on that day were US$0.11878, what would be the cash gain or loss incurred by Magna Carta? Assume that the margin account remains constant during the March futures holding period and that Magna Cartas opportunity cost of capital is 10 percent.