Assume today's settlement price on a CME EUR futures contract is $1.1140/EUR. You havea short position in one contract with a standard contract size of 125,000€. Yourperformance bond account currently has a balance of $2,000. The next three days'settlement prices are $1.1126, $1.1133, and $1.1050. Calculate the balance of theperformance bond account after the third day.

A future contract is similar to an agreement to purchase or sell an item at a specific price at a…

Answered: settlement prices are $1.1126, $1.1133,…

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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settlement prices are $1.1126, $1.1133, and $1.1050. Calculate the balance of the performance bond account after the third day.