Using the quotations in Exhibit 7.3, note that the June 2016 Mexican peso futures contract has a price of $0.05481 per MXN. You believe the spot price in September will be S0.06133 per MXN. What speculative position would you enter into to attempt to profit from your beliefs? Calculate your anticipated profits, assuming you take a position in three contracts. What is the size of your profit (loss) if the futures price is indeed an unbiased predictor of the future spot price and this price materializes? EXHIBIT 7.3 CME Group Currency Futures Contract Quotations Open interest Japanese Yen (CME)-12,500,000; $ per 100 159,608 9 9255 9202 Canadian Dollar (CME)-CAD 100,000; $ per CAD 118,862 7 5 British Pound (CME)-E62,500;$per E 1.4416 1.4421 1.4353 1.4333 1.4342 0023 238.280 1.4398 Swiss Franc (CME)-CHF 125,000;$per CHF 1.0258 1.0231 1.0235 1.0282 0032 0032 Australian Dollar (CME)-AUD 100,000;$ per AUD 7246 119,002 6 2 Mexican Peso (CME)-MXN 500,000; $per MXN 91,662 Euro (CME)-125,000; $per 2 1.1327 339,149 1.1347 1.1347 Euro/Japanese Yen (ICE-US)-125,000; Y per 122.66 123.53 122.64 123.36 123.35 8,857 Euro/British Pound (ICE-US) 125,000;E per 78845 78665 00050 Euro/Swiss Franc (ICE-US) 125,000; CHF per 1.1067 16,149 Sources: The Wall Street Journal, Tuesday, May 17, 2016. p. C7. Euro/JPY. Euro/GBP, and Euro/CHF quotations are May 16,2016 values from Bloomberg. Using the quotations in Exhibit 7.3, note that the June 2016 Mexican peso futures contract has a price of $0.05481 per MXN. You believe the spot price in September will be S0.06133 per MXN. What speculative position would you enter into to attempt to profit from your beliefs? Calculate your anticipated profits, assuming you take a position in three contracts. What is the size of your profit (loss) if the futures price is indeed an unbiased predictor of the future spot price and this price materializes? EXHIBIT 7.3 CME Group Currency Futures Contract Quotations Open interest Japanese Yen (CME)-12,500,000; $ per 100 159,608 9 9255 9202 Canadian Dollar (CME)-CAD 100,000; $ per CAD 118,862 7 5 British Pound (CME)-E62,500;$per E 1.4416 1.4421 1.4353 1.4333 1.4342 0023 238.280 1.4398 Swiss Franc (CME)-CHF 125,000;$per CHF 1.0258 1.0231 1.0235 1.0282 0032 0032 Australian Dollar (CME)-AUD 100,000;$ per AUD 7246 119,002 6 2 Mexican Peso (CME)-MXN 500,000; $per MXN 91,662 Euro (CME)-125,000; $per 2 1.1327 339,149 1.1347 1.1347 Euro/Japanese Yen (ICE-US)-125,000; Y per 122.66 123.53 122.64 123.36 123.35 8,857 Euro/British Pound (ICE-US) 125,000;E per 78845 78665 00050 Euro/Swiss Franc (ICE-US) 125,000; CHF per 1.1067 16,149 Sources: The Wall Street Journal, Tuesday, May 17, 2016. p. C7. Euro/JPY. Euro/GBP, and Euro/CHF quotations are May 16,2016 values from Bloomberg