(Futures) You enter to short Japanese Yen 12,500,000 futures delivered in 6 months. The future price is F6 (¥/$)=116.9. If at the maturity, the spot rate is ¥93.2/$, and your position is still alive, then your profit(loss) is $_ _. (Two decimal places.)

Q: A one year gold futures contract is selling for $1,685. Spot gold prices are $1,610 and the one year…

A: fair value of futures = Spot rate * (1+risk free rate )^n

Q: make sure there is no eroor when giving me the answers please ASAP A Index has currently a value of…

A: SOLUTION.

Q: The following table shows the futures price data today for Commodity X, and you purchased a futures…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: The continuously compounded interest rate is 5% p.a. and the storage cost for copper is 8% p.a. What…

A:

Q: The January 2023 S&P 500 cash index is 3950 points while the S&P 500 futures March 2023 index is…

A: You have asked a question with multiple parts. Only the first three parts have been answered. Please…

Q: Suppose you sell six September 2020 palladium futures contracts this day at the last price of the…

A: Step 1:Number of contract = n = 6Quantity per contract = q = 50 troy ozStrike price = k =…

Q: uotations in Exhibit 7.3, note that the September 2016 Mexican peso futures contract has a price of…

A: Future contracts are that to be delivered and settled in the future date and future prices and as…

Q: Please give me the correction calculation and include all the necessary calculations for the…

A: Understanding Arbitrage OpportunityArbitrage is the practice of taking advantage of price…

Q: (mark-to-market) You enter a short position in a € future contract with the size of €125,000 today.…

A: Future contracts are contracts done today but settled on the date and rate specified in the contract…

Q: A Euro futures contract expires in 82 days. The interest rates are i$=6.2% and i€=3.0% respectively.…

A: Forward rate = S x (1 + r($) x (t / 360)) / (1 + r(euro) x (t / 360))Where, S= spot rater($) =…

Q: (mark-to-market) You enter a long position in a € future contract with the size of €125,000 today.…

A: 1. Given:  - Future contract size = €125,000  - Time to expiration = 90 days  - US interest rate…

Q: The S&P 500 spot price is $4,570. The futures price with 6-months delivery is $4,895. The risk-less…

A: To calculate the profit, you need to consider the present value of the future price and compare it…

Q: Suppose the 180-day futures price on gold is $110.00 per ounce and the volatility is 20.0%. Assume…

A: Black-Scholes Option Pricing Model is a quantitative approach to determine the value of a European…

Q: Suppose you purchase the July 2020 call option on corn futures with a strike price of $3.35. Assume…

A: Let's go through each part of the problem step by step.  Part a: Cost per bushel of corn The option…

Q: After determine that there is an arbitrage opportune and the future prices for year 1 and 2 From…

A: Calculation for 2-year futures contract:Given:S=10,000q=3%=0.03r=9%=0.09T=2 yearsPlugging in these…

Q: What is the value of the put option with the same street, price and time to maturity.

A: An option is an agreement between two parties granting one the opportunity to buy or sell a security…

Q: Suppose the continuously compounding interest rate r is constant. Given S(0), find the price of the…

A: Continuously Compounding Interest Rate (r): This is the interest rate at which an investment grows…

Q: 3. You take a long position in the Gold futures on 1/15 when the futures price is 1600/oz. Each…

A: Given Data: Contract Size100Initial Margin10000Maintenance Margin6000

Q: Assume that today the euro futures contracts with a September 15th delivery date are priced at…

A: Foreign Exchange is currency exchange. It is the rate of currency which between the two countries…

Q: price on a CME EUR futures contract is $1.3140 per euro. You have a long position in one contra size…

A: In future trading is done on margin basis and there is daily settlement of margin account.Given:Spot…

Q: Assume today's settlement price on a CME EUR futures contract (with EUR 125,000 per contract] is…

A: In daily marking to market method, the account balance is altered each day based on the gain or loss…

Q: As a US exporter selling to Europe. You wish to hedge a 1,040,000 Euro to be received in 3 months…

A: Calculation of dollars received if U.S. exporter hedge the position with futures or if Exporter…

Q: (mark-to-market) You enter a short position in a € future contract with the size of €125,000 today.…

A: Future contracts are contracts done today but settled on the date and rate specified in the contract…

Q: The current level of the S&P 500 is 2,800. The dividend yield on the S&P 500 is 2%. The risk-free…

A: A futures contract is a contract to either buy or sell an asset (it can be a commodity or a…

Q: Suppose the S&P 500 index futures price is currently 950 and the initial margin is 10%. You wish to…

A: Compounding could be a budgetary concept where profit from an investment generate extra profit over…

Q: Assume today's settlement price on a CME EUR futures contract is $1.3154 per euro. You have a short…

A: In a futures contract, the buyer and the seller agree to buy or sell a defined amount of an…

Q: Assume you are a corn farmer, and you want to lock in a price for part of your upcoming harvest. You…

A: December future contracts = $7.10/Bu Anticipate basis = -$0.05/bu  Hedge price is the price which is…

Q: Your company needs £500,000 per month. You choose to hedge half of the required amount by entering…

A: Futures are standardized contracts. They are used to buy or sell underlying asset at the…

Q: Today is September 1. A futures contract on crude oil expiring on December 20 of the same year has a…

A: The Black-Scholes model is a mathematical formula used to estimate the price of European-style…

Q: Suppose it is Jan 1st, and the futures price for August 1st delivery of a 1-year zero-coupon…

A: A bank has taken a position in the futures contract of a 1-year zero-coupon government T-bill. Based…

Q: A non-dividend paying asset is current priced at $25 and the risk-free interest rate is 8% per…

A: The current Price is $25 The risk-free rate is 8% per annum The remaining time period to expiry is 6…

Exchange Rate Risk

It is the possibility that the value of a currency will fluctuate in the future. In the wake of globalization, business establishments have increasingly ventured into international markets. The volume of international trade has prospered excellently in the near past and is expected to be more affluent in the future. The use of exchange-traded derivative financial instruments has been multi-folded to provide for the requirements of various MNCs and offshore potential investors. Most banks and financial institutions have helped integrate the global economies. Our Government has introduced some bold and extreme measures to fulfil the purpose behind the fiscal, industrial, and monetary policies. The enactment of GST is a huge step towards streamlining the taxation system of the country. Owing to Covid-19, this aspect of corporate risk management has become critical.