Suppose on May 1, 2021 the U.S. company IBSK, Inc. hedges its GBP 1,250,000 receivable...
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Suppose on May 1, 2021 the U.S. company IBSK, Inc. hedges its GBP 1,250,000 receivable position (expected to be paid on June 1, 2021) using GBP futures. One GBP futures contract contains GBP 62,500, and the June futures contract matures on June 15, 2021.
Suppose the following exchange rates exist (#USD/GBP) on May 1, 2021 (when IBSK, Inc. opens its futures position) and on June 1, 2021 (when it receives the British pounds and wishes to close out its futures position):
May 1
June 1
Spot
$ 1.3910/GBP
$1.4020/GBP
June Futures
$1.3820/GBP
$1.3900/GBP
If IBSK, Inc. closes out its futures position on June 1, 2021, it will have ______ approximately ____________ on its futures position held between May 1 and June 1.
Group of answer choices
gained; $1250
lost; $10,000
lost; $15,000
gained; $10,000
lost; $1250
gained ; $15,000
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