a) Explain a foreign currency futures contract and outline the
differences between futures and forwards. b) The Chicago Mercantile
Exchange (CME) and the New York Board of Trade (NBOT) operate
futures markets in currencies in the following pairs US$/pounds and
US Dollar/Pound. The value standardize size of a sterling futures
contract is 6,500 pounds. Describe how a UK company that expects to
received US$800,000 in three months time can use a futures contract
to hedge transaction exposure if the following...