Questions 3-7 are based on the following information: Assume the six-month European call option has a striking price of $0.95/CHF. Assume the option premium is $0.02/CHF. If at the due date, the value of the Swiss Franc has decreased to $0.90/CHF. The option should ______. The net profit/loss of the buyer is _______.
Read DetailsAssume today’s settlement price on a CME GBP futures contract is $1.4948/£. You have a short position in one contract (with the standardized contract size of £62,500). Your initial performance bond account currently has a balance of $4,000 and the maintenance level is $2,500. The next three days’ settlement prices are $1.4908, $1.5088, and $1.5208. Fill out the following table by calculating the changes in the performance bond account from daily marking-to-market and the balance of the performance bond account after the third day. Day Settlement price ($/£) Daily Gain/Loss ($) Account balance ($) 0 1.4948 — $4,000 1 1.4908 2 1.5088 3 1.5208 Daily account balance (please fill out ONLY the account balance, not daily profit/loss): Day 1: $ [l1] , Day 2: $ [l2] , Day 3: $ [l3] . Total profit/loss: $ [l4] . (Use negative sign in front of the number for loss) Are you going to have a margin call during the three-day trading period? Answer: [l5] (yes/no). If your answer is yes, you will have a margin call on Day [l6] (insert 1, 2, or 3). If you decide to stay in the market, you need to deposit $ [l7] in order to continue playing the game.
Read DetailsIf you entered a short position in an Australian dollars December (maturity month) futures contract in CME today, it means that you agreed to ________ (buy/sell) AUD_______. (You may check the standardized contract size from CME website)
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