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5. Will Wade buys 10 GBP futures contracts? The size of each contract is 62,500 GBP. The futures price is currently 1.30 USD per
5. Will Wade buys 10 GBP futures contracts? The size of each contract is 62,500 GBP. The futures price is currently 1.30 USD per GBP. He uses only the minimal initial margin necessary to fund the trade. The required initial margin per 1 contract is 8000 USD. a. What is his initial leverage? b. If GBP futures decline to 1.20 USD per GBP, how much money does he win/lose? c. What is his new leverage if he does not add additional capital and does not change the number of futures contracts held?
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Financial Management For Decision Makers
Authors: Peter Atrill
9th Edition
1292311436, 978-1292311432
