The September 2010 Mexican peso futures contract has a price of $0.77275 per 10 MXN. You believe the spot price in September will be $0.77000 per 10 MXN. The contract size for one MXN futures contract is MXN 500,000. a. What speculative position would you enter into to attempt to profit from your beliefs? Calculate your anticipated profits, assuming you take a position in three contracts.

b. What is the size of your profit (loss) if the futures price is indeed an unbiased predictor of the future spot price and this price materializes?