It is now January. The current annual interest rate is 6.4%. The June futures price for gold is $1485.80, while the December futuresprice is $1,494. Assume the June contract expires in exactly 6 months and the December contract expires in exactly 12 months.Required:a. Calculate the appropriate price for December futures using the parity relationship? (Do not round intermediate calculations. Roundyour answer to 2 decimal places.)x Answer is complete but not entirely correct.$ 1,529.86Price for December futures

The future price of December month to be calculated with the help of time given and price of June…

Answered: Required: a. Calculate the appropriate…

Required: a. Calculate the appropriate price for December futures using the parity relationship your answer to 2 decimal placer)

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter5: Currency Derivatives

Section: Chapter Questions

Problem 3BIC

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Question

It is now January. The current annual interest rate is 6.4%. The June futures price for gold is $1485.80, while the December futures
price is $1,494. Assume the June contract expires in exactly 6 months and the December contract expires in exactly 12 months.
Required:
a. Calculate the appropriate price for December futures using the parity relationship? (Do not round intermediate calculations. Round
your answer to 2 decimal places.)
x Answer is complete but not entirely correct.
$ 1,529.86
Price for December futures

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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.
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