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
Chapter5: Currency Derivatives
Section: Chapter Questions
Problem 3IEE
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Transcribed Image Text:Yesterday, you entered into a futures contract to buy €62,500 at $1.50/€. Your initial margin was $3,750 (-0.04 x €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/€
O none of the options
$1.500/€
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