49 Question: A speculator in the futures market wishing to lock in a price at which they could ________ a foreign currency will ________ a futures contract.
Question: A speculator that has ________ a futures contract has taken a ________ position.
Question: Peter Simpson thinks that the U.K. pound will cost $1.43/£ in six months. A 6-month currency futures contract is available today at a rate of $1.44/£. If Peter was to speculate in the currency futures market, and his expectations are correct, which of the following strategies would earn him a profit?
Question: Jack Hemmings bought a 3-month British pound futures contract for $1.4400/£ only to see the dollar appreciate to a value of $1.4250 at which time he sold the pound futures. If each pound futures contract is for an amount of £62,500, how much money did Jack gain or lose from his speculation with pound futures? A) $937.50 loss B) $937.50 gain C) £937.50 loss D) £937.50 gain Answer: B
Question: Which of the following statements regarding currency futures contracts and forward contracts is NOT true?