Consider the following futures contract for the currency of Brazil, Brazilian real (BRL). Contract volume: 100,000 Brazilian reals Initial margin: $1000 Maintenance margin: $800 Day Settle price ($/BRL) 1 0.19 2 0.189 3 0.186 4 0.187 (a) What’s an example of a hedger who might use this contract? (b) Assuming the USD has neither appreciated nor depreciated, has the Brazilian real appreciated or depreciated between days 1 and 4?
Consider the following futures contract for the currency of Brazil, Brazilian real (BRL). Contract volume: 100,000 Brazilian reals Initial margin: $1000 Maintenance margin: $800 Day Settle price ($/BRL) 1 0.19 2 0.189 3 0.186 4 0.187 (a) What’s an example of a hedger who might use this contract? (b) Assuming the USD has neither appreciated nor depreciated, has the Brazilian real appreciated or depreciated between days 1 and 4?
Chapter9: Forecasting Exchange Rates
Section: Chapter Questions
Problem 5ST
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Consider the following futures contract for the currency of Brazil, Brazilian real (BRL).
Contract volume: 100,000 Brazilian reals
Initial margin: $1000
Maintenance margin: $800
Day |
Settle price ($/BRL) |
1 |
0.19 |
2 |
0.189 |
3 |
0.186 |
4 |
0.187 |
(a) What’s an example of a hedger who might use this contract?
(b) Assuming the USD has neither appreciated nor
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