Assignment:
Q1. Suppose that the forward ask price for March 20 on euros is $0.9127 at the same time that the price of CME euro futures for delivery on March 20 is $0.9145. How could an arbitrageur profit from this situation? What will be the arbitrageur’s profit per futures contract (contract size is €125,000)?
Q2. Suppose that Dell buys a Swiss franc futures contract (contract size is SFr 125,000) at a price of $0.83. If the spot rate for the Swiss franc at the date of settlement is SFr 1 = $0.8250, what is Dell’s gain or loss on this contract?
Your answer must be, typed, double-spaced, Times New Roman font (size 12), one-inch margins on all sides, APA format and also include references.