The treasurer for Pittsburgh Iron Works wishes to use financial futures to hedge her interest rate exposure. She will sell five Treasury futures contracts at $107,000 per contract. It is July and the contracts must be closed out in December of this year. Long-term interest rates are currently 16.30 percent. If they increase to 17.50 percent, assume the value of the contracts will go down by 15 percent. Also, if interest rates do increase by 1.2 percent, assume the firm will have additional interest expense on its business loans and other commitments of $90,000. This expense, of course, will be separate from the futures contracts. a. What will be the profit or loss on the futures contract if interest rates increase to 17.50 percent by December when the contract is closed out

Suppose that the u. s. dollars-mexican pesos exchange rate is fixed by the u. s. and mexican governments. assume also that labor is mobile between the united states and mexico due to low transportation costs. which of the following situations is likely to happen as a result of a simultaneous increase in the demand for u. s. goods and decrease in the demand for mexican goods? (pick mexican unemployment rate increases, and the country undergoes bad economic times for a sustained u. s. unemployment rate increases, and the country undergoes bad economic times for a sustained mexican unemployment rate rises at first, but it soon drops as unemployed mexicans move to the united states for mexican unemployment rate rises at first, but then it drops as mexican pesos depreciate against u. s. dollars.