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Determine the total dollar amount of your profit or loss

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Problem - Assume that one year ago, the spot rate of the British pound was $1.70. One year ago, the one-year futures contract of the British pound exhibited a discount of 6 percent. At that time, you sold futures contracts on pounds, representing a total of £1,000,000. From one year ago to today, the pound's value depreciated against the dollar by 4 percent. Determine the total dollar amount of your profit or loss from your futures contract.

Reference no: EM132907844

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