) A foreign exchange trader enters into a long forward contract to buy 1 million pounds sterling at an exchange rate of 1.2500$ in 6 months. At the same time another trader takes a long position in 16 contracts for 6-month futures on sterling. The futures price is 1.2500$ and each contract is on 62,500 pounds.

a) At the end of the day, both prices are 1.2540$. What is the value of the two contracts? Explain.

b) Three months later, the futures trader offsets his position at 1.2560$ and buys on the spot at 1.2570$. What is the effective exchange rate paid?

2) If I buy a 20 Year T-bond futures at 134'08 and sell it at 130'30, how muchmoney will I have made?

3) It is January 23, 2023. The price of a Treasury Bond with a 4% coupon that matures on October 12, 2030 is quoted at 102'07. What is the cash price ?