Exercise #$1$: Compute the mark to market on the GBP $62,500$ futures contract. You go long $6$ June GBP contracts at $1\mathrm{.}2950$ USD$/$GBP on a Monday in April. The prices then change as follows: Tuesday $1\mathrm{.}2875,$ Wednesday $1\mathrm{.}2900,$ Thursday $1\mathrm{.}2850.$ On the last day of trading in June, the contract settles at the then$-$prevailing spot price of $1\mathrm{.}2895.$ Compute the daily variation margin and the cumulative variation margin for each day.

Exercise #$2$: Compute the mark to market on the $5000$ bu corn futures contract. You go short $10$ June corn contracts at $535$ cents per bushel on a Monday in April. The prices then change as follows: Tuesday $525,$ Wednesday $562,$ Thursday $552.$ On the last day of trading in June, the contract settles at the then$-$prevailing spot price of $538.$ Compute the daily variation margin and the cumulative variation margin for each day.

Exercise #$3$: Graph the unhedged, fully hedged and $50\%$ hedged corporate situation. Delta Airlines is selling an Airbus $321$ airplane to Lufthansa for $100$ million. The plane will be delivered and paid for in $6$ months. Delta is worried that the euro might depreciate to USD$/$EUR $1\mathrm{.}00$ or even lower. Currently, the spot exchange rate is USD$/$EUR $1\mathrm{.}07.$ Citibank quotes a $6-$month forward contract at USD$/$EUR $1\mathrm{.}085.$ Construct the following graph: the vertical axis is total receipt for the plane in dollars. The horizontal axis is the possible future spot exchange rates in $6$ months ranging from $0\mathrm{.}9$ to $1\mathrm{.}20.$ Graph the unhedged position, a $100\%$ hedge with a short position on $100$ million in a $6-$month forward contract and a $50\%$ hedge with a short position on $50$ million in a $6-$month forward contract.