June 2019 Mexican peso futures contract has a price of $0.05182 per MXN. You believe the spot price in June will be 0.05821 per MXN. a. What speculative position would you enter into to attempt to profit from your beliefs? O Short position O Long Position b. Calculate your anticipated profits, assuming you take a position in three contracts. (Do not round intermediate calculations. Round your answer to the nearest whole number.) Anticipated profit c. What is the size of your profit (loss) if the futures price is indeed an unbiased predictor of the future spot price and this price materializes? (A Negative value should be indicated with a minus sign. Do not round intermediate calculations. Round your answer to the nearest whole number.) Profit or loss
June 2019 Mexican peso futures contract has a price of $0.05182 per MXN. You believe the spot price in June will be 0.05821 per MXN. a. What speculative position would you enter into to attempt to profit from your beliefs? O Short position O Long Position b. Calculate your anticipated profits, assuming you take a position in three contracts. (Do not round intermediate calculations. Round your answer to the nearest whole number.) Anticipated profit c. What is the size of your profit (loss) if the futures price is indeed an unbiased predictor of the future spot price and this price materializes? (A Negative value should be indicated with a minus sign. Do not round intermediate calculations. Round your answer to the nearest whole number.) Profit or loss
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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June 2019 Mexican peso futures contract has a price of $0.05182 per MXN. You believe the spot price in June will be 0.05821 per
MXN.
a. What speculative position would you enter into to attempt to profit from your beliefs?
O Short position
O Long Position
b. Calculate your anticipated profits, assuming you take a position in three contracts. (Do not round intermediate calculations. Round
your answer to the nearest whole number.)
Anticipated profit
c. What is the size of your profit (loss) if the futures price is indeed an unbiased predictor of the future spot price and this price
materializes? (A Negative value should be indicated with a minus sign. Do not round intermediate calculations. Round your answer
to the nearest whole number.)
Profit or loss
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