On June 15, a US firm anticipates that it will need A$500,000 in August to pay...

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On June 15, a US firm anticipates that it will need A$500,000 in August to pay for its order of supplies from an Australian supplier. Consequently, it purchases a futures contract for this amount (for August 18 settlement). On June 15 this contract was priced at $0.63 per A$. On July 7, the American firm realizes that it will not need to order the supplies any more. It consequently sells the contract to offset the contract it purchased in June (for August settlement). At this time the futures contract is priced at $0.60 per A$. Show how much profit or loss was made on this futures transaction by the American company. On June 15, a US firm anticipates that it will need A$500,000 in August to pay for its order of supplies from an Australian supplier. Consequently, it purchases a futures contract for this amount (for August 18 settlement). On June 15 this contract was priced at $0.63 per A$. On July 7, the American firm realizes that it will not need to order the supplies any more. It consequently sells the contract to offset the contract it purchased in June (for August settlement). At this time the futures contract is priced at $0.60 per A$. Show how much profit or loss was made on this futures transaction by the American company.

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