#4

Suppose you take a long position in 10 euro contracts at a price of $0.9102/ on the CME (Euro contract consists of 250,000 euros). Prices over the next two days are S0.9056/ and S0.9020. If your initial performance margin was $50,000, what is the value of your performance in day 3? 1. Do problem 2 again, assuming you have a short position in the 10 euro contracts. 2. 3. The spot rate is currently $0.98/. You take a long speculative position in 200 euro futures contracts which are currently quoted at $0.9785V. Upon maturity, the contract is quoted at $0.9810. What are your proceeds from this position? Contracts are for 250,000 euros. The spot rate is currently $0.98VE. You take a short speculative position in 200 euro futures contracts which are currently quoted at 0.9785V At the contract's maturity, the euro has appreciated 3.75% relative to the USD. What are your proceeds from this position? Contracts are for 250,000 euros. 4. Consider a 3-month European call option written on 62,500 with a strike price of 1.40/, and an option premium of $0.05/E 5. Graph the cash flow schedule from the perspective of the buyer & the seller of the option. Be sure to clearly label profits, losses, the break-even point, and at what a