1. Assume today's settlement price on a CME,EUR futures contract is $1.3140/EUR.You have a short position in one contract.Your performance bond account (or the deposit) currently has a balance of $1,700. The next three days' settlement prices are $1.3126, $1.3133, and $1.3049.Calculate the changes in the performance bond account from daily marking-to-market and the balance of the performance bond account after the third daywhere EUR125,000is the contract size of one EUR contract.
2. Do problem 2 again assuming you have a long position in the futures contract.
3. Assume that one year ago, the spot rate of the British pound was $1.70. One year ago, the one-year futures contract of the British pound exhibited a discount of 6%. At that time, you sold futures contracts on pounds, representing a total of 1,000,000 pounds. From one year ago to today, the pound's value depreciated against the dollar by 4 percent. Determine the total dollar amount of your profit or loss from your futures contract.