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For starters below is a bit of detail on the futures contracts i The required deposit in the performance bond account is $5,000 ii) The
For starters below is a bit of detail on the futures contracts i The required deposit in the performance bond account is $5,000 ii) The settlement price for the day on the Tokyo Mercantle Exchange for futures contract is $20.50% iii) In the next three days' settlement prices will be S20.32, S20.42 and S20.30; v Under the circumstances, you will have a long position in the futures contract v The contractual size of one Yen contract is 200,000. Required: From the infomation above Calculate the changes in the performance bond account from daily marking-to-market and the balance of the performance bond account after the third day: 110 Marks Discuss Five differences between Futures and Forwards contracts 110 Marks iExplain what the analyst meant by marked to market 1 3 Marks v The client is confused with the technical jargon and has asked you to give a detailed account of how initial performance bond operates and its significance 17 Marks For derivative market to operate most efficiently two types of market participants are necessary. Explain the role of these market participants in the derivative market. I Marks Explain what is meant by reversing trade and why is necessary for the futures Market 1 5 Marksl i Describe what an option is and further explain the meaning of the statement on taking an insurance' policy on its foreign currency exposure |5 Marks
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