1. 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?
2. CME euro futures for delivery on March 20 is $1.3345. How could an arbitrageur profit from this situation? What will be the arbitrageur’s profit per futures contract (contract size is €125,000)?
3. Citigroup sells a call option on euros (contract size is €500,000) at a premium of $0.04 per euro. If the exercise price is $1.34 and the spot price of the euro at date of expiration is $1.36, what is Citigroup’s profit (loss) on the call option?