A UK company sells goods to a US company to the value of $2,650,000 in August. It
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A UK company sells goods to a US company to the value of $2,650,000 in August. It is now June and spot is $1.9800/£. A June futures contract is quoted as $1.9790. A September futures contract is quoted as $1.9000. Sterling futures are traded in contracts of £62,500. The UK company always buys the minimum number of contracts, being prepared to leave unhedged any small residual amount.
How many contracts should be bought?
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