Yesterday, you entered into a futures contract to buy €62,500 at $1.50/€. Your initial margin was $3,750 (-0.04 * €62,500 × $1.50/€4 percent of the contract value in dollars). Your maintenance margin is $2.000 (meaning that your broker leaves you alone until your account balance falls to $2.000). At what settle price (use 4 decimal places) do you get a margin call? O $1.5280/€ O $1.4720/€ none of the options

Yesterday, you entered into a futures contract to buy €62,500 at $1.50/€. Your initial margin was $3,750 (-0.04 * €62,500 × $1.50/€4 percent of the contract value in dollars). Your maintenance margin is $2.000 (meaning that your broker leaves you alone until your account balance falls to $2.000). At what settle price (use 4 decimal places) do you get a margin call? O $1.5280/€ O $1.4720/€ none of the options

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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You entered into a futures contract to buy €62,500 at $1.20/€ yesterday. Your initial margin was $4,200. Your maintenance margin is $2,500 (meaning that your broker leaves you alone until your account balance falls to $2,500). At what settle price will you get a margin call? $1.2750/€ $1.0272/€ $1.1728/€ O $1.5800/€
Yesterday, you entered into a futures contract to sell €75,000 at $1.79 per €. Your initial performance bond is $1,500 and your maintenance level is $500. At what settle price will you get a demand for additional funds to be posted? $1.6676 per €. $1.1840 per €. $1.2084 per €. $1.7767 per €.
If the initial speculative margin of a futures contract is $2,000, the maintenance margin is $1,800 and your trading account balance has increased to $2,300, how much must you deposit to comply with your margin requirement?
You are to pay €360,000 on May 16. Today’s spot rate is $1.10/€. The forward rate is $1.12/€. On May 16 the spot rate is $1.11/€. Futures contracts are for €125,000 each. Q1. How many contracts do you enter? Q2. Do you enter contracts to buy or to sell? On May 16 you, 1) close out the forward contracts, and 2) receive the €360,000 and exchange them for dollars. Q3. Did you make or lose money on the contracts? Q4. How much money did you make or lose on the contracts? Q5. When you combine the gain or loss on the futures contracts with the dollars exchanged for the €360,000 what was the effective dollar/euro total exchange rate? Q6. Why was the amount you received per euro more than the $1.12 future contract hedge amount?
Assume that you entered into a futures contract to buy C82,500 at $1.20 per C. Suppose the futures price closes today at $1.25. How much have you made/lost? tof Select one: O a You have made $2.500.00. O b. You have made $4125.00. O G. You have lost $2,500.00. Od You have lost $4,125.00.
This morning (Day 0) you take a short position in a pound futures contract that matures in 3 days (Day 3). The future price is $1.9750 today. The contract size is £62,500 and its initial performance bond and maintenance bond are $2,430 and $1,830, respectively. a. (b) Assuming that the daily settlement prices are indicated below, how would the daily change in settlement future prices affect your account? Show the daily gain/loss and account balance. Day 0 1 2 3 Settlement 1.9750 1.9700 1.9815 1.9907 Total Gain/Loss Account Balance b. During this period, did you receive a margin call? If you did, on what day? c. At the end of Day 3, how much in total did you make/lose on this futures contract?
Assume today’s settlement price on a CME EUR futures contract is $1.3144 per euro. You have a short position in one contract. EUR125,000 is the contract size of one EUR contract. Your performance bond account currently has a balance of $1,900. The next three days’ settlement prices are $1.3130, $1.3137, and $1.3053. Calculate the changes in the performance bond account from daily marking-to-market and the balance of the performance bond account after the third day. Required: Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
You are to receive €360,000 on May 16. Today’s spot rate is $1.10/€. The forward rate is $1.12/€. On May 16 the spot rate is $1.11/€. Futures contracts are for €125,000 each. On May 16 you, 1) close out the forward contracts, and 2) receive the €360,000 and exchange them for dollars. Q4. How much money did you make or lose on the contracts? Q5. When you combine the gain or loss on the futures contracts with the dollars exchanged for the €360,000 what was the dollar/euro total exchange rate? Q6. Why was the amount you received per euro more than the $1.12 future contract hedge amount?
Assume today's settlement price on a CME EUR futures contract is $1.3140 per euro. You have a long position in one contract. EUR125,000 is the contract size of one EUR contract. Your performance bond account currently has a balance of $1,700. The next three days' settlement prices are $1.3126, $1.3133, and $1.3049. Calculate the changes in the performance bond account from daily marking-to-market and the balance of the performance bond account after the third day. Required: Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Balance of the performance bond account
Assume today's settlement price on a CME EUR futures contract is $1.3154 per euro. You have a short position in one contract. EUR125,000 is the contract size of one EUR contract. Your performance bond account currently has a balance of $2,400. The next three days' settlement prices are $1.3140, $1.3147, $1.3063. Calculate the changes in the performance bond account from daily marking-to-market and the balance of the performance bond account after the third day. Required: Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Balance of the performance bond account
Assume today’s settlement price on a CME EUR futures contract is $1.3130/EUR. You have a short position in one contract. Your performance bond account currently has a balance of $1,700. The next day’ settlement price is $1.3059. Calculate the balance of the account at the end of the day. (USD, no cents)
Assume that today's settlement price on a CME EUR futures contract is $1.1145/EUR. You have a long position in one contract. Your margin balance is currently of $2,763. The next three days' settlement prices are $1.1144, $1.1141, and $1.1148. Calculate the balance in the margin account after the third day due to dailly mark-to-market. The size of a futures contract on the euro is EUR125,000. Note: Enter your answer rounded to the nearest dollar. For example, if the calculated balance on the margin account after the third day of mark-to-market is $2,475.80, enter it as: 2476 or 2,476.

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