You expect to receive 40,000,000 Japanese Yen on close of business day, Friday, January 17th. You decide to hedge your risk with the futures contracts. 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 12,500,000 yen

Make a short position and document the gain or loss due to marking to market every day that your position is open. What is the total cost in US$ after you have closed out your futures positions, and made your payment?

Japanese Yen Futures Data Japanese Yen Data Daily Settlements for Japanese Yen Future (FINAL)Trade Date: Wednesday, 01/15/2020 Estimated Prior Day Month Open High Low Last Change Settle Volume lopen Interest FEB 20 91150 91235B91065A911454 +5091130 54 804 MAR 20 91210 | 91380 91195 91280 +5091265 93,669 181,364 APR 20 91450 91490B 9145091450 +5091420 2 803 MAY 20 - 191665B - 191610B +50 91595 0 0 JUN 20 J91770 191820B 191675A191745A| +55 91735 883 SEP 20 - 192205B - 92205B +55 92190 0 5 Daily Settlements for Japanese Yen Futures (FINAL)Trade Date: Friday, 01/17/2020 Estimated Prior Day Month Open High Low | Last Change Settle Ki Volume Open Interest FEB 20 90810 91000B 90810 190920A -10 90925 5 6 794 MAR 20 91045 91140 90935 91060 -10 91060 87,462 193,495 APR 20 - 91255B|91135A191210A -5 91215 0 803 MAY 20 - 91425B|91310A 191385A -15 91385 0 0 JUN 20 J91500 | 91600 91410 91530B| -10 91525 | 49 T 916 SEP 20 . - 191940A191965B -10 191980 0 5 Spot data: Juha Lay YYYY/MM/DDWdXJUSD/JPY 2458863 2020/01/14 Tue 0.0090874 24588642020/01/15 Wed 0.0090958 2458865|2020/01/16 Thu|0.0090839 24588662020/01/17 Fri 0.0090798 Japanese Yen Futures Data Japanese Yen Data Daily Settlements for Japanese Yen Future (FINAL)Trade Date: Wednesday, 01/15/2020 Estimated Prior Day Month Open High Low Last Change Settle Volume lopen Interest FEB 20 91150 91235B91065A911454 +5091130 54 804 MAR 20 91210 | 91380 91195 91280 +5091265 93,669 181,364 APR 20 91450 91490B 9145091450 +5091420 2 803 MAY 20 - 191665B - 191610B +50 91595 0 0 JUN 20 J91770 191820B 191675A191745A| +55 91735 883 SEP 20 - 192205B - 92205B +55 92190 0 5 Daily Settlements for Japanese Yen Futures (FINAL)Trade Date: Friday, 01/17/2020 Estimated Prior Day Month Open High Low | Last Change Settle Ki Volume Open Interest FEB 20 90810 91000B 90810 190920A -10 90925 5 6 794 MAR 20 91045 91140 90935 91060 -10 91060 87,462 193,495 APR 20 - 91255B|91135A191210A -5 91215 0 803 MAY 20 - 91425B|91310A 191385A -15 91385 0 0 JUN 20 J91500 | 91600 91410 91530B| -10 91525 | 49 T 916 SEP 20 . - 191940A191965B -10 191980 0 5 Spot data: Juha Lay YYYY/MM/DDWdXJUSD/JPY 2458863 2020/01/14 Tue 0.0090874 24588642020/01/15 Wed 0.0090958 2458865|2020/01/16 Thu|0.0090839 24588662020/01/17 Fri 0.0090798