Mr. Lecourt sells short one contract for September delivery of 125,000 euro for $134,375. Mr. Lecourt covers his short when the exchange rate is $1.15 per euro. Mr Lecourt

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Mr. Lecourt initially sells the euros at an exchange rate that implies $134,375 for 125,000 euros (given). When he covers his short, he buys back the euros at $1.15 per euro, which amounts to $143,750 (125,000 euros * $1.15/euro). The difference between his selling price ($134,375) and his buying price ($143,750) is a loss of $9,375.

Mr Lecourt Sells Short One Contract for September Delivery of 125,000