What happened to the futures price over the november

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Reference no: EM13936166

Price movements of currency futures. Assume that on 1 November, the spot rate of the British pound was £0.63 and the price on a December futures contract was £0.64. Assume that the pound depreciated during November so that by 30 November it was worth £0.60.

a. What do you think happened to the futures price over the month of November? Why?

b. If you had known that this would occur, would you have purchased or sold a December futures contract in pounds on 1 November? Explain.

Reference no: EM13936166

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