Question: Ques 2: (3 marks) James is an active trader in forex market. On Tuesday morning he took he took a Short (Sell) position in a

Ques 2: (3 marks) James is an active trader in forex market. On Tuesday morning he took he took a Short (Sell) position in a CAD futures contract in SIMEX for CAD 125, 000 that matures on Thursday evening. The agreed rate is USD 0.8109/CAD. He expects that CAD will depreciate against USD in future. Tuesdays settlement price in SIMEX is USD 0.8028 =1CAD . At the close of trading on Wednesday, the futures price rises to USD 0.8211/CAD. At the close of trading on Thursday, the (Ft) price falls to USD 0.8101 /CAD and the contract matures. James had a balance of CAD 3,600 in his performance bond account on Tuesday morning. Requirement: a. Show the details of daily marking to market of the currency future contract ( 2 Marks) b. Calculate the net gain/loss ( 0.5 mark) c. How much is the performance bond account balance after the settlement in Thursday (0.5 mark)

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