You entered into a short CME futures contract on 125,000 euros at the day's opening price of $1.10 per euro. Your initial margin was 6,500 and your maintenance margin is $4,000. a. The settlement price one day after you open your position is $1.09 per euro. Calculate the balance on your margin account on this day. b. The settlement price two days after you open your position is $1.11 per euro. Calculate the balance on your margin account on this day. C. At what settle price do you get a margin call? For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac).

You entered into a short CME futures contract on 125,000 euros at the day's opening price of $1.10 per euro. Your initial margin was 6,500 and your maintenance margin is $4,000. a. The settlement price one day after you open your position is $1.09 per euro. Calculate the balance on your margin account on this day. b. The settlement price two days after you open your position is $1.11 per euro. Calculate the balance on your margin account on this day. C. At what settle price do you get a margin call? For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac).

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter5: Currency Derivatives

Section: Chapter Questions

Problem 38QA

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