Question

Yesterday, you entered into a futures contract to sell €62,500 at $1.50 per €. Your initial performance bond is $1,500 and your maintenance level is $500. At what settlement price will you get a demand for additional funds to be posted?

A. $1.5160 per €.
B. $1.208 per €.
C. $1.1920 per € .
D. $1.1840 per €.

Answer 1

Answer:

A. $1.5160 per €.  

Explanation:

1500+62500*(1.50-x)<=500

=>x>=1.5+(1500-500)/62500

=>x>=1.516

Therefore, at a settle price of $1.5160 per euro or more additioanl funds demand will be there.