UNIT 8 ASSIGNMENT QUESTIONS:

1)
Mexican Peso / Futures Contract Quotations ($ per 500,000 MXN)
Maturity Open High Low Settle
March 0.10953 0.10988 0.10930 0.10958
June 0.10790 0.10795 0.10778 0.10773
September 0.10615 0.10615 0.10610 0.10573

The table above includes quotations for Mexican Peso (Ps) future contracts against $ with
different maturities. Each future contract is for 500,000 Mexican pesos. John Doe, the currency
speculator sells eight June future contracts.
Using this information, answer the following questions:

a) What is the value of his position at maturity the ending spot rate is $0.12000/Ps?
b) What is the value of his position at maturity the ending spot rate is $0.09800/Ps?
c) What is the value of his position at maturity the ending spot rate is $0.11000/Ps?
2)

British Pound Futures Quotations, $/£ , Each Contract = 62,500 Pounds

Maturity Open High Low Settle
March 1.4246 1.4268 1.4214 1.4228
June 1.4164 1.4188 1.4146 1.4162

Jennifer Cruz, a currency trader for ABC Investments, uses the futures quotes on British Pound
given in the above table to speculate on the value of the pound.
a) If Jennifer buys 5 June pound futures, and the spot rate at maturity is $1.4034/ £, what is the
value of her position?
b) If Jennifer sells 12 March pound futures, and the spot rate at maturity is $1.4475/ £, what is the
value of her position?
c) If Jennifer buys 3 March pound futures, and the spot rate at maturity is $1.4475/ £, what is the
value of her position?
d) If Jennifer sells 10 June pound futures, and the spot rate at maturity is $1.4034/ £, what is the
value of her position?