You have purchased three futures contracts on the Brazilian real at a price of $0\mathrm{.}3191.$ The notional amount is BRL $100,000$ per contract. Your initial margin is $$5000$ per contract and the maintenance margin is $$3600$ per contract.

a$.$ What is your profit$/$loss if you close your position at $0\mathrm{.}3250?$

b$.$ At what price would you receive your first margin call?

For part b$,$ you should work backwards. First ask: How much of a loss must you suffer to receive a margin call in the first place?

You observe the following:

Spot rate: $,$ AUDUSD $0\mathrm{.}7309$

Forward rate: AUDUSD $0\mathrm{.}7251$

Interest rates US: $4\mathrm{.}0\%(APR),$Australia:$5\mathrm{.}6\%($APR$)$

Your firm has revenue of $A$$$4,000,000,$ receivable $3$ months from today. Please graph the hedged cash flow in dollar terms using:

a$.$ Forward Hedge

b$.$ Money Market Hedge.

Be sure to carefully label the $x$ and $y$ axes of your graphs and show the important cash flows.