An American company sells yen futures contracts to cover possible exchange losses on its export orders denominated
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An American company sells yen futures contracts to cover possible exchange losses on its export orders denominated in Japanese yen. The amount of the initial margin is
\($20,000,\) and the maintenance margin is 75 percent of the initial margin. The value of the company’s position declines by \($6,000\) because the spot rate for yen has increased.
(a) What is the dollar amount of the maintenance margin?
(b) Should the broker issue margin calls to the company?
(c) What is the amount of additional deposit needed to restore the account to the initial margin level?
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Kirti Kaushal
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Related Book For 
Global Corporate Finance Text And Cases
ISBN: 9781405119900
6th Edition
Authors: Suk H. Kim, Seung H. Kim
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