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Current spot and futures exchange rates

Question:

A bank customer will be going to London in June to purchase $100,000 in new inventory. The current spot and futures exchange rates are as follows:

Exchange Rates (Dollars/Pound)
Period   Rate

Spot   1.5342
March           1.6212
June             1.6901
September   1.7549
December   1.8416

The customer enters into a position in June futures to fully hedge her position. When June arrives, the actual exchange rate is $1.725 per pound. How much did she save?

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Finance Basics: Current spot and futures exchange rates

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