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14. Suppose you have a short position in three Euro futures contracts in the Chicago Mercantile Exchange (CME) today, the contract size is 80,000, the
14. Suppose you have a short position in three Euro futures contracts in the Chicago Mercantile Exchange (CME) today, the contract size is 80,000, the initial performance bond initial margin) is 2 percent of the contract value and the maintenance performance bond (maintenance margin or minimum margin) is equal to 75 percent of the initial performance bond. a) (1 points) What is the initial balance in your account (today, in dollars) if the settlement price today is 0.8/$? Solution: b) (4 points) The settlement prices for the next day is listed in the table. What is the account balance the next day? Will you receive a margin call? If so, specify how much money will you need to deposit in your account to keep your position from being closed. Day Settlement price 0 0.800 / $ 0.791 / $ 1 Solution
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