Question

a. Today, you are looking at a Euro Futures contract:

Maturity: Due on the 3rd Wednesday of September 2020

Size: €125,000

Price of the futures today $1.12/€

If you believe the spot rate would be $1.15 in September 2020,
then you should ____ (Buy or Sell) the futures.

True or False _________: if you buy the futures today and do
nothing until the maturity day, then you will need to buy €125,000
at $1.12/€ in September 2020.

True or False _________: if you buy the futures today and do
nothing until the maturity day, then you will need to sell €125,000
in the spot market at whatever the prevailing rate is, to clear
your speculative position.

b. Separate from (a), if tomorrow you change to believe the
spot rate would be $1.09 in September 2020 and the futures price is
still $1.12/€, then you should ____ (Buy or Sell) the
futures.

True or False _________: if you sell the futures tomorrow and
do nothing until the maturity day, then you will need to sell
€125,000 at $1.09/€ in September 2020.

c. If you buy one futures in (a) and sell two futures in (b)
according to your beliefs at the time of trading, what would be
your overall profit (or loss)?

Answer #1

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Today is March 4. You believe that the Euro (EUR) will
appreciate.
Your trading authority is US$ 15,000,000.
The spot $/€ is 1.3100
The September contract is trading at $/€ 1.3106
The EUR contract size is €100,000.
You decide to use the futures market at the Chicago Mercantile
Exchange to speculate you entire trading authority.
1, You would most likely:
Buy futures contracts at $/€ 1.3100.Buy futures contracts at $/€
1.3106.Sell futures contracts at $/€ 1.3100.Sell futures contracts
at $/€...

If you believe the Brazilian real will fall from the
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gain?
a.
sell futures on Brazilian real
b.
buy call options on the Brazilian real
c.
none of the other answers
d.
buy futures on Brazilian real

As of today, what is the value of the Dow Jones Industrials
(DJIA Mini) September 2020 futures?
How many of these futures contracts
can you buy with one million USD?
Assume the value of the futures at
maturity is 27,000, what would happen if you keep the contracts
until maturity?
How much would be your gain/loss in
dollars?

8. As of today, what is the value of the Dow Jones Industrials
(DJIA Mini) September 2020 futures? How many of these futures
contracts can you buy with one million USD? Assume the value of the
futures at maturity is 27,000, what would happen if you keep the
contracts until maturity? How much would be your gain/loss in
dollars?

8. As of today, what is the value of the Dow Jones Industrials
(DJIA Mini) September 2020 futures? How many of these futures
contracts can you buy with one million USD? Assume the value of the
futures at maturity is 27,000, what would happen if you keep the
contracts until maturity? How much would be your gain/loss in
dollars?

You enter a long position in a € future contract with the size
of €125,000 today. The futures expire in 90 days. The interest
rates are i$=2% and i€=4%. The current spot
rate is $1.38/€. Assume 360 days a year. If the spot rate is
$1.43/€ the next day and interest rates remain the same, How much
is your profit or loss for this day?
Select one:
a. -$3974.78
b. $3974.78
c. $6228.80
d. $6250
e. -$6228.80

The three-month futures price for the British pound is
$1.2890/₤. You expect the spot price three months from today to be
$1.2560/₤. The British pound contract size is ₤62,500.
1.) If you are a speculator would you buy the futures contracts
or sell them. Explain your answer.
2.) How much profit would you make if you trade 25 contracts and
the expectations come true?
3.) If you were a MNC with A/R of ₤5 million due in three
months, would...

A friend is selling you today a bond purchased in 2010 with a
25-year maturity at $ 910.00. The bond has an annual coupon rate of
$ 80. The prevailing rate in the current market is 10.0%. What is
the value of the bond? Would you buy it if interest rates plan to
drop to 6% in two years? How much would you earn if you wait for
expiration?
PLEASE HELP QUICK

10)You enter a long position in a € future contract with the
size of €125,000 today. The futures expire in 90 days. The interest
rates are i$=2% and i€=4%. The current spot
rate is $1.38/€. Assume 360 days a year. If the spot rate is
$1.43/€ the next day and interest rates remain the same, How much
is your profit or loss for this day?
Select one:
a. $6228.80
b. $3974.78
c. $6250
d. -$6228.80
e. -$3974.78
9) The interest...

You have the following market data.
A British pound futures contract expires in 12 months.
The annualized, continuously compounded risk-free interest
rates in Britain and the U.S. are 1.55% and 1.01%, respectively,
from today until expiration.
The spot exchange rate between the British pound and the U.S.
dollar is $1.645 per British pound.
What is the no-arbitrage futures price (expressed in U.S.
dollars)?
Do not round values at intermediate steps in your
calculations. Enter your answer in dollars and cents...

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