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Business, 23.12.2020 05:20 brapmaster764

Suppose today is November 15. Today (Nov 15), a US firm is planning to import Mexican caviar worth Pesos 2 million due on December 15 (one month later). The firm decides to hedge its payables position by using December peso futures. The spot rate on Nov 15 is US$ 0.0630 / peso and the December futures price on Nov 15 is at $0.0665 per peso. One month late on December 15, the spot rate is $0.0570 / peso while the December futures price is $0.0615 / peso. Assume contract size is 2 million pesos. What is the gain or loss from the futures hedge: a. Loss of $10,000 b. Gain of $10,000 c. Loss of $9,000 d. Gain of $12,000

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