Suppose that you are a currency speculator, based in the U.S., attempting to capitalize on a possible depreciation of the Canadian dollar (C$). On January 1st, the spot rate for the Canadian dollar is $0.73. This is also the price at which futures contracts for Canadian dollars are being sold. You have C$130,000.00 to use on these positions. In the previous parts of this question, you're sold a futures contract for Canadian dollars that will let you receive $94,900.00 for (C$130,000.00) on March 10th. When the Canadian dollar depreciated to $0.59 you purchased C$130,000.00 for $76,700.00 on February 10th. In total, after the futures contract you sold settles, you will have( loss or gain) from these positions totaling _______.

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To calculate the total gain or loss from the currency positions we need to consider the initial valu... View the full answer