Question: You enter a long position in a future contract with the size of 125,000 today. The futures expire in 90 days. The interest rates

You enter a long position in a future contract with the size

 

You enter a long position in a future contract with the size of 125,000 today. The futures expire in 90 days. The interest rates are i-5% and i=10.4%. The current spot rate is $1.38/. Assume 360 days a year. If the spot rate is $1.43/ the next day and interest rates remain the same, your profit or loss for this day is $ (Keep the sign and two decimal numbers.)

Step by Step Solution

3.46 Rating (143 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

To calculate the profit or loss for the day we need to consider the change in the spot rate and the ... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!