Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Suppose that on Monday, 7 July, you assume a long position in one December British pound futures
contract at the futures price of $1.10/E. The initial margin is $2,000, and the maintenance margin is
$1,500. The contract size is £125,000. Assume you do not withdraw excess money from your margin
balance. All margin requirements are met with cash. The settlement prices for Monday and Tuesday are
shown in the following:
Monday, 7 July: $1.15
Tuesday, 8 July: $1.05
What is the balance in your margin account at the end of Tuesday?
Select one:
a. $2,000
b. -$4,250
c. -$1,000
d. $750
e. $1,750
f. $1,500
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Transcribed Image Text:Suppose that on Monday, 7 July, you assume a long position in one December British pound futures contract at the futures price of $1.10/E. The initial margin is $2,000, and the maintenance margin is $1,500. The contract size is £125,000. Assume you do not withdraw excess money from your margin balance. All margin requirements are met with cash. The settlement prices for Monday and Tuesday are shown in the following: Monday, 7 July: $1.15 Tuesday, 8 July: $1.05 What is the balance in your margin account at the end of Tuesday? Select one: a. $2,000 b. -$4,250 c. -$1,000 d. $750 e. $1,750 f. $1,500
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