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Bank Customer - Spot and Futures

24. 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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The customer enters into June future. The contracted price for June future is 1.6901. The actual spot price in June is $1.725 per ...

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