What is the variation margin

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Reference no: EM131928602

1. A trader buys a 90-day Eurodollar futures contract at 94.85. The next day, interest rates rise to 5.325%. What is the variation margin? Assume the contract multiplier is $25/basis point.

2. An investor wants to purchase a level annuity of $74 per annum payable monthly in arrear for 10years. Find the purchase price, given that it is calculated on the basis of an interest rate of 7.5% per annum convertible quarterly.

Reference no: EM131928602

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