Price movements of currency futures assume that on 1, Ask an Expert

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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.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91607050

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