Currency Question PLEASE HELP!

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BaseballRedhawks

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This is from you know where… page 62 of volume 2…
Having a tough time comprehending the answer also… And since wulf is in germany… should the base currency be the sterling?? Someone please help!
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base would be euro
position 5.1 / 0.75 - 5 / 0.78 = 0.3898 (gain on position)
gain / loss on futures = –5 ( 1/0.785 - 1/0.79) = -0.0403
Net Gain / loss = 0.3898 - 0.0403 = 0.3495
% = 0.3495 / (5/0.78) = 5.45%
 
Cpk- in this case, he is not rolling the forward ie he seem to be exiting correct?, then why calc gain between the forwards? Ie .785 which is prolly another 180 day forward
 
you are not rolling the forward, but there is a gain/loss on the forwards between the entry and exit. So return needs to account for that as well.
Baseball - is my answer correct?
 
not sure.. but maybe its just all then numbers thats throwing me off..
Basically, if i think high level about it.. itsn ot too diffuclt.. basically you need to calculate how much you position in the currency changed over that peirod of them… and then calculate the change in value of the futures… then combine them and compare that to the beginning amount…..
boom - now i just need to learn to execute.
 
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