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Assume todays settlement price on a Chicago Mercantile Exchange EUR (euro) futures contract is $.0725/MXN. You BUY a futures contract to hedge an exposure to
- Assume todays settlement price on a Chicago Mercantile Exchange EUR (euro) futures contract is $.0725/MXN. You BUY a futures contract to hedge an exposure to MXN5,000,000 payable. Your initial margin account balance is $25,000. The next three days settlement prices are $.0720/MXN, $.0715/MXN, and $.0730/MXN. Calculate the changes in the margin account (and the new balances) from daily marking-to-market adjustments over the next three days. The contract size is 5,000,000 Mexican Pesos.
ANS: DAY 0 MB = $25,000
DAY 1 = _________ MB = $__________
DAY 2 = _________ MB = $__________
DAY 3 = _________ MB = $__________
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