Ch02HW_Quest - CHAPTER 2 Mechanics of Futures Markets...

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CHAPTER 2 Mechanics of Futures Markets Practice Questions Problem 2.10. Explain how margins protect investors against the possibility of default. Problem 2.15. At the end of one day a clearinghouse member is long 100 contracts, and the settlement price is $50,000 per contract. The original margin is $2,000 per contract. On the following day the member becomes responsible for clearing an additional 20 long contracts, entered into at a price of $51,000 per contract. The settlement price at the end of this day is $50,200. How much does the member have to add to its margin account with the exchange clearinghouse? Problem 2.17. The forward price on the Swiss franc for delivery in 45 days is quoted as 1.1000. The futures price for a contract that will be delivered in 45 days is 0.9000. Explain these two quotes. Which is more favorable for an investor wanting to sell Swiss francs? Problem 2.23. Suppose that on October 24, 2010, you take a short position in an April 2011 live-cattle
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Ch02HW_Quest - CHAPTER 2 Mechanics of Futures Markets...

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