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009050 / JPY b) December 1999 Japanese yen? 009180 / JPY Question 3: What is the settle price in USD for: a) September 1999 Australian dollars? 6402 / AUD b) December 1999 Swiss francs? 6693 / CHF Question 4: What is the open interest on: a) September 1999 British pounds? 53,157 contracts b) December 1994 Canadian dollars? 4,698 contracts c) September 1999 Eurodollars (CME)? 2 v11/02/99 p01/24/00 FUTURES MARKET PRICES 3-13 PROGRESS CHECK 3 (Continued) Question 5: Complete the following statements by matching Column B to Column A.
They buy where it is undervalued, sell where it is overvalued, and make a profit if the differential exceeds transaction and carrying costs (the cost of arbitrage). Locals Locals are traders working on the floor of an exchange who engage in speculation and arbitrage for their own accounts. Local traders hope to profit from the minute-by-minute flow of futures transactions. Hedgers Offsetting risk in current position Hedging is the purchase or sale of financial instruments with the objective of protecting overall results by offsetting the risk inherent in a current position.
He knows his organization will be receiving USD 10 million three months ahead, which he will invest in Treasury bonds. Since T-bond futures are quoted in USD 100,000 lots, he buys 100 T-bond futures in order to lock in today's futures interest rate. 2) A Japanese exporter of robots will receive USD 1,000,000 in six months. S. dollar might fall in value against the Japanese yen. S. dollars in the future and receive yen in the future. S. dollar falling in value and the yen rising in value. 3) A corporate treasurer expects floating (variable) interest rates to rise.
