What is the annualized percentage of forward premium

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Problem -

-The 125-day forward rate for the euro is $1.13, while the current spot rate for the euro is $1.14. What is the annualized percentage (%) of forward premium or discount of the euro (round up to 2 decimals)?

-When the futures price on euros is below the forward rate on euros for the same settlement date, astute investors may attempt to simultaneously ____ euros forward and ____ euro futures.

a. sell; sell

b. buy; buy

c. sell; buy

-John bought a futures contract worth 12.5 million JPY at a future rate of $0.9029 per 100 yen and maturing in Dec. John made an upfront payment of $5,000 to open a position, and the CME required a $3,000 maintenance margin for his account. At the end of the first day, the spot rate of JPY was $0.8910 per 100 yen. At the end of the second day, the spot rate of JPY was $0.8868 per 100 yen. On which day did John receive a margin call? How much should John deposit to his account to maintain the long position?

Reference no: EM132928879

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