If You Bought Eight Contracts of Euro Currency Futures (I

question 63

Multiple Choice

If you bought eight contracts of Euro currency futures (i.e. total of one million Euros) with an initial margin of $2835 per contract. You buy the contracts at $1.3468/Euro and after a few days of trading ends at a price of $1.3534/Euro with the following ending price each day:
$1) 3465, $1.3443, $1.3434 and $1.3534. What would be the margin account value sequence be? Starting value being $22,680 .

• A) $22,680, $22,180, $20,380, $19,280, $29,280
• B) $22,680, $22,380, $20,180, $19,280, $29,280
• C) $22,680, $22,180, $19,280, $22,380, $29,280
• D) none of the above

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Definitions:

Conventional Capital Budgeting

A process of planning and evaluating large-scale investments and expenditures to optimize a company's capital expenditures and investments.

Forecasting Risk

The potential for a forecast to be inaccurate, which can lead to incorrect business decisions and financial performance assessments.

Sensitivity Analysis

A financial model technique used to determine how different values of an independent variable impact a particular dependent variable under a given set of assumptions.

Base Case

The default scenario in project assessments or financial modeling, representing expected conditions without any changes or shocks.