Question
The spot rate of the euro today is $1.0848/. The three-month futures price for the euro is $1.0940/. You expect the spot price three months
The spot rate of the euro today is $1.0848/. The three-month futures price for the euro is $1.0940/. You expect the spot price three months from today to be $1.1280/. The euro contract size is 125,000.
How much profit would you make if you buy 100 euro contracts and the spot price of the euro at futures expiration ended up at $1.1280/?
If you were an MNC and you sell finished products to a German distributer for 65 million that are due to be paid to you in euros in three months, would you buy or sell the euro futures if you decide to hedge your position?
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