On Monday, you sold one Eurodollar interest rate futures contract for $97,500. Initial performance bond is...

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On Monday, you sold one Eurodollar interest rate futures contract for $97,500. Initial performance bond is $5,000 and the maintenance performance bond is $4,000. Daily gain/loss Day Monday Tuesday Wednesday Settle price 97,500 96,000 99,000 ( ) ) a) Figure out daily gain/loss and the margin balance on Tuesday. Margin balance ( 5,000 ) :) b) Do you receive the margin call or not on Wednesday? If you do not receive a margin call, you don't pay anything. However, if you receive a margin call, how much do you pay to restore your margin account to initial performance bond? On Monday, you sold one Eurodollar interest rate futures contract for $97,500. Initial performance bond is $5,000 and the maintenance performance bond is $4,000. Daily gain/loss Day Monday Tuesday Wednesday Settle price 97,500 96,000 99,000 ( ) ) a) Figure out daily gain/loss and the margin balance on Tuesday. Margin balance ( 5,000 ) :) b) Do you receive the margin call or not on Wednesday? If you do not receive a margin call, you don't pay anything. However, if you receive a margin call, how much do you pay to restore your margin account to initial performance bond?

Answer rating: 100% (QA)

To solve this question lets first figure out the daily gain or loss for Tuesday and then calculate t... View the full answer