Saguaro Funds. Tony Begay, a currency trader for Chicago-based Saguaro Funds, us

Question

Saguaro Funds. Tony Begay, a currency trader for Chicago-based Saguaro Funds, uses futures quotes on the British pound (pound) to speculate on the value of the pound. Use the futures quotes in the table below to answer the following questions. If Tony buys 5 June pound futures, and the spot rate at maturity is $1.3976/pound, what is the value of her position? If Tony buys 12 March pound futures, and the spot rate at maturity is $1.4564/pound, what is the value of her position? If Tony buys 3 March pound futures, and the spot rate at maturity is $1.4564/pound, what is the value of her position? If Tony buys 12 June pound futures, and the spot rate at maturity is $1.3976/pound, what is the value of her position?

Explanation / Answer

Settle: The closing price at the end of the trading session

We can use the settle price to do valuation.

A. The value of june future is 1.4162$, since its buy future the value will be (1.3976-1.4162)×5×62,500 = -5812.5$

B.Thevalue of 12 march future is , since its sell future (1.4228 - 1.4564)*12*62500= -25,200$

C.The value of 3 march buy future is , (1.4564 -1.4228)*3*62500 = 6300$

D.The value of12 june sell futures is, (1.4262-1.3976)*12*62,500 = 21,450$

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