Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The table shows the behavior of a futures contract on Australian dollars (AS). Suppose you entered into the futures contract to buy A$100,000 (Contract size

image text in transcribed
image text in transcribed
The table shows the behavior of a futures contract on Australian dollars (AS). Suppose you entered into the futures contract to buy A$100,000 (Contract size - A$100,000) at $0.7078/AS on November 8, 2018. The initial performance bond is $1,375 and the maintenance level is $1,250. a. Fill the columns below based on the price history of this contract. Please show your calculations below (8 points). Date Settlen/ent price (S/AS) Gain/Loss (5) Balance (S) 11/08/18 0.7078 - 1,375 11/09/18 0.7103 11/12/18 0.7063 11/13/18 0.7124 11/14/18 0.7119 11/15/18 0.7107 11/16/18 0.7131 b. (3 points) On which date did you need to deposit additional funds to maintain your contract position? Whats the amount of the additional funds needed to be deposited into your performance bond account? c. (4 points) Suppose you closed out this futures contract on November 16, 2018 (you were holding the contract position until November 16, 2018). Calculate your total gain or loss from this futures contract

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

An Introduction to Investment Banks, Hedge Funds, and Private Equity

Authors: David P. Stowell

1st edition

978-0123745033, 0123745039, 978-9380931074

More Books

Students also viewed these Finance questions

Question

What are the determinants of cash cycle ? Explain

Answered: 1 week ago