7.2 Laura Cervantes. Laura Cervantes, the currency speculator we met in this chapter, sells eight June futures contracts for 500,000 pesos at the closing price quoted in Exhibit 7.1.
a. What is the value of her position at maturity if the ending spot rate is $0.12000/Ps?
b. What is the value of her position at maturity if the ending spot rate is $0.09800/Ps?
c. What is the value of her position at maturity if the ending spot rate is $0.11000/Ps?
EXHIBIT 7.1 Mexican Peso (CME)—MXN 500,000; $ per MXN
Lifetime
Maturity Open High Low Settle Change High Low Open Interest
Mar 0.10953 0.10988 0.10930 0.10958 ... 0.11000 0.09770 34,481.00
June 0.10790 0.10795 0.10778 0.10773 ... 0.10800 0.09730 3,405.00
Sept 0.10615 0.10615 0.10610 0.10573 ... 0.10615 0.09930 1,481.00
All contracts are for 500,000 Mexican pesos. "Open" means the opening price on the day. "High" means the high price on the day. "Low" indicates the lowest price on the day. "Settle" is the closing price on the day. "Change" indicates the change in the settle price from the previous day's close. "High" and "Low" to the right of "Change" indicate the highest and lowest prices this specific contract (as defined by its maturity) has experienced over its trading history. "Open Interest" indicates the number of contracts outstanding.