Question
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
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.
- (10 points) 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.
- (10 points) 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?
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Multinational Business Finance
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett
16th Edition
013749601X, 978-0137496013
