Chapter 5 Example Problems: On 2-27-18. Euro Example Spot Rate on the EUR USD - 1.2245 1 month Forward expires on 3-27-18, Price = 1.2298 3 month Forward expires on 5-27-18. Price = 1.2328 April 18 Futures Contract expires on 4-16-18, Price = 1.2291 May 18 Futures Contract expires on 5-14-18 Price - 1.2312 June 18 Futures Contract expires on 6-18-18 Price = 1.2347 16 360 -0.035) Futures Contracts: M # 1) You Buy 4 EUR May 18 future contracts on 2-27-18 oz/m) a. What is your profit/loss if the spot price on the EUR is $1.25 on 3-14-18, and you close you position out. Assume interest rates have changed dramatically and the Euro trades at an annual Forward Premium of 3% 5 b. What is your profit/loss if the spot price on the EUR is $1.18 on 3-14-18 and you close you position out. Assume interest rates have changed dramatically and the Euro trades at an annual Forward Premium of 3%. 1181 052) You Sell 3 EUR Jun 18 futures contracts on 2-27-18. - day a. What is your profit/loss if the spot price on the EUR is $1.27 on 4-18-18, and you close you position out. Assume interest rates have changed dramatically and the Euro trades at an annual Forward Premium of 3.5%. b. What is your profit loss if spot price on the EUR is $1.17 on 4-18-18, and you close you position out. Assume interest rates have changed dramatically and the Euro trades at an annual Forward Premium of 3.5%. F SCHP) $ 4(170035) orward Contracts: = 1117 Xhoar x 1131445 3) If you purchased 4 million Euros worth of goods on 2-27-18 with payment due on (Mar. 27th 2018) 3-27-18. What is the cost of the goods on 3-27-18 if you are long 4 million Euros Forward and the Euro on 3-27-18 is trading at $1.157 4 4) If you purchased 4 million Euros worth of goods on 2-27-18 with payment due on nk 3-27-18. What is the cost of the goods on 2-27-18 if you are long 4 million Euros Forward and the Euro on 3-27-18 is trading at $1.31? llion 298 Chapter 5 Example Problems: On 2-27-18. Euro Example Spot Rate on the EUR USD - 1.2245 1 month Forward expires on 3-27-18, Price = 1.2298 3 month Forward expires on 5-27-18. Price = 1.2328 April 18 Futures Contract expires on 4-16-18, Price = 1.2291 May 18 Futures Contract expires on 5-14-18 Price - 1.2312 June 18 Futures Contract expires on 6-18-18 Price = 1.2347 16 360 -0.035) Futures Contracts: M # 1) You Buy 4 EUR May 18 future contracts on 2-27-18 oz/m) a. What is your profit/loss if the spot price on the EUR is $1.25 on 3-14-18, and you close you position out. Assume interest rates have changed dramatically and the Euro trades at an annual Forward Premium of 3% 5 b. What is your profit/loss if the spot price on the EUR is $1.18 on 3-14-18 and you close you position out. Assume interest rates have changed dramatically and the Euro trades at an annual Forward Premium of 3%. 1181 052) You Sell 3 EUR Jun 18 futures contracts on 2-27-18. - day a. What is your profit/loss if the spot price on the EUR is $1.27 on 4-18-18, and you close you position out. Assume interest rates have changed dramatically and the Euro trades at an annual Forward Premium of 3.5%. b. What is your profit loss if spot price on the EUR is $1.17 on 4-18-18, and you close you position out. Assume interest rates have changed dramatically and the Euro trades at an annual Forward Premium of 3.5%. F SCHP) $ 4(170035) orward Contracts: = 1117 Xhoar x 1131445 3) If you purchased 4 million Euros worth of goods on 2-27-18 with payment due on (Mar. 27th 2018) 3-27-18. What is the cost of the goods on 3-27-18 if you are long 4 million Euros Forward and the Euro on 3-27-18 is trading at $1.157 4 4) If you purchased 4 million Euros worth of goods on 2-27-18 with payment due on nk 3-27-18. What is the cost of the goods on 2-27-18 if you are long 4 million Euros Forward and the Euro on 3-27-18 is trading at $1.31? llion 298