Use the following information to determine the probability distribution of per unit gains from selling Mexican peso

Question:

Use the following information to determine the probability distribution of per unit gains from selling Mexican peso futures.

• Spot rate of peso is $.10.

• Price of peso futures per unit is $.102 per unit.

• Your expectation of peso spot rate at maturity of futures contract is:

Possible Outcome for Future Spot Rate Probability .09 10% .095 70% 20% .11

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