Question
On Monday morning, a trader takes a long position in Australian dollars (AUD) future currency contract that matures on Wednesday afternoon. The agreed upon price
On Monday morning, a trader takes a long position in Australian dollars (AUD) future currency contract that matures on Wednesday afternoon. The agreed upon price is USD 0.7669/AUD for a currency lot of AUD100,000.On Monday close the currency future price rises to USD 0.7681/AUD. On Tuesday close the price falls to USD 0.7615/AUD and on Wednesday close the price rises to USD 0.7674/AUD and the trader takes delivery of AUD 100,000.Determine the cash flow on Tuesday close T+1,when the contract is marked to market.
a.
The trader loses and pays AUD 660
b.
The traded loses and pays AUD 770
c.
None of the option is correct
d.
The trader gains and receives AUD 120
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