What is the contract size (aka. contract unit) of 1 Euro FX futures contract? Is the British Pound futures contract size the same as Euro FX futures? How many Euro FX futures contracts do you need to long/short today?

Finance H.W

1. When you convert 3.75 mil Euros into USD next month, are you “buying” or “selling” Euros? To lock the future exchange rate in this case, should you “long” or “short” Euro FX futures today? Explain.

2. What is the contract size (aka. contract unit) of 1 Euro FX futures contract? Is the British Pound futures contract size the same as Euro FX futures? How many Euro FX futures contracts do you need to long/short today?
(Hint: Go to https://www.cmegroup.com (official futures exchange) and locate the Euro FX futures. Check “Contract Specs” tab.)

The rest of this project will confirm whether your actions taken on 10/25/2021 (=answers to Q1/Q2) are indeed the correct hedging strategy at the end. If you don’t find sufficient evidence of lowering risk in Q3-Q10, it’s likely that your answers to Q1/Q2 are incorrect so revise your answers and solve them again, as necessary.