Yesterday,you Entered into a Futures Contract to Buy €62,500 at $1.50/€.Your

question 90

Multiple Choice

Yesterday,you entered into a futures contract to buy €62,500 at $1.50/€.Your initial margin was $3,750 (= 0.04 × €62,500 × $1.50/€ = 4 percent of the contract value in dollars) .Your maintenance margin is $2,000 (meaning that your broker leaves you alone until your account balance falls to $2,000) .At what settle price (use 4 decimal places) do you get a margin call?

• A)$1.4720/€
• B)$1.5280/€
• C)$1.500/€
• D)none of the options

---

Definitions:

LIFO

Last In, First Out; an inventory valuation method where the items acquired last are the first to be sold.

Weighted-Average

A statistical method used to attribute different weights to data points or components based on their significance.

Cost Flow

Describes the manner in which costs move through a company's accounts, from the point of initial recording to their ultimate impact on financial statements.

Physical Flow

Physical flow pertains to the actual movement and processing of goods and materials through a production system or supply chain, often measured to assess efficiency and effectiveness.