Reference no: EM13887504
1. What's the difference between Euro FX futures and Eurodollar futures?
2. You are converting the currency in late November. But why do we need to use December 2015 futures instead of November 2015 futures? And what is the contract size of the Euro FX futures contract?
3. How many Euro FX futures contract do you have to buy or short to hedge the risk? Specify explicitly whether you are taking a long or short position of the Euro FX futures.
4. For every trading day (no weekends/holidays) during the sample period, collect the daily EUR/USD exchange rate and EUR/USD futures price. If you do not want to collect these prices every day, see hint #2 below. Create a spreadsheet and enter dates and both prices.
5. Calculate the Euro FX futures daily gains, and cumulative gains for each day using the position you answered in Q3.
6. Assume the initial margin requirement is $5,000 per contract. Calculate the margin account balance each day. Is there a margin call, when the maintenance margin requirement is $3,500 per contract? If yes, add the required cash to the margin account to restore initial margin account requirement.
8. For each day, calculate the value of your unhedged position (= 2.5 mil Euros in US $), and the values of your hedged position (= unhedged value + futures cumulative gain in Q5).
9. Plot the unhedged values and hedged values in Q8 over time. In addition, calculate the standard deviations of the unhedged values and that of the hedged values in Q8. Discuss the results.
10. Using Q9 answers, confirm that you successfully lowered the exchange rate risk.
|
Fundamental to project risk management
: Identify two metrics that are important for you when working on a project and substantiate your answer using a practical example and credible academic or scholarly sources.
|
|
Biorhythm- matlab problem
: All three cycles started at zero when you were born. How long does it take until all three simultaneously return to that initial condition? How old were you, or will you be, on that date? Plot your biorhythm near that date. You should ?nd the lcm ..
|
|
Preemptive strikes
: Preemptive Strikes We've read both sides of the issue of whether or not the United States is justified in conducting preemptive strikes. But really, this is about us making decisions for ourselves and justifying it (or not) to the rest of the world.
|
|
How much work does friction do between point a and b
: At point A the wooden block below is traveling at 2.3 m/s. The coefficient of kinetic friction between the level table and the block is 0.22. How much work does friction do between point A and point B (just before it hits the floor)
|
|
Difference between euro fx futures and eurodollar futures?
: What's the difference between Euro FX futures and Eurodollar futures?
|
|
Surface of a ceramic material
: Rapid heating and cooling can cause cracks to start at the surface of a ceramic material. Sometimes the cracks meet the surface at 90? and sometimes at 45? to the surface.
|
|
Grainger order per replenishment
: Demand for fasteners at W.W. Grainger is 20,000 boxes per month. The holding cost at Grainger is 20 percent per year. Each order incurs a fixed cost of $400. The supplier offers an all unit discount pricing scheme with a price of $5 per box for order..
|
|
The sovereign debts of these nationals
: 3) Greece, Ireland, Portugal, and Spain all went through national budget difficulties in recent years. Use the data below to answer questions regarding the sovereign debts of these nationals (All data comes from the OECD and is in billions of curre..
|
|
Compare workplace environment at larger versus smaller audit
: Compare and contrast the workplace environments at larger versus smaller audit firms. Explain which type of environment you think would best fit your needs.
|