You decide to short seven July futures contracts of GBP 100,000 each. The spot rate...
90.2K
Verified Solution
Link Copied!
Question
Finance
You decide to short seven July futures contracts of GBP 100,000 each. The spot rate is 0.72 GBP/USD, the 30-day forward rate is 0.70 GBP/USD, your expectation is 0.75 GBP/USD in July. If your expectation proves to be correct, how much profit or loss will you make?
a. USD -21,000
b. USD 21,000
c. GBP -21,000
d. GBP -21,000
Is the following option ITM, ATM or OTM? And what are its payoff (or intrinsic value) and profit or loss, respectively? Long Put, premium CAD0.01, strike rate CAD/USD is 1.30, spot rate CAD/USD is 1.28.
a. ITM, CAD0.02, CAD0.01 profit
b. ATM, CAD0.01, CAD0.01 profit
c. OTM, CAD0.00, CAD0.01 loss
d. ITM, CAD0.01, CAD0.02 profit
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
