The futures price of British pounds is $ 2.00. Futures

| June 4, 2016

Question
3. The futures price of British pounds is $ 2.00. Futures contracts are for £ 10,000, so a contract is worth $ 20,000. The margin requirement is $ 2,000 a contract, and the maintenance market requirement is $ 1,200. A speculator expects the price of the pound to fall and enters into a contract to sell pounds.

a) How much must the speculator initially remit?

b) If the futures price rises to $ 2.13, what must the speculator do?

c) If the futures price continues to rise to $ 2.14, how much does the speculator have in the account?

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