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1) Is it the same if I calculate the predicted future price like this -> 1.1449-((1.1449-1.1422)*2/3) ?
But answer scheme calculation is like this -> 1·1422 + ((1·1449 – 1·1422) x 1/3)) because the answer will be the same which is 1.1431.2) Why method to calculate futures in Nutourne Co (Dec2018) different with Boullain Co ? I am a bit confused with futures receipt in the summary in Boullain Co. Why the futures receipt no need to multiply with futures price like in Nutourne Co ?
3) For question (c), what does $20 represent and how to get $20 ?
4) To calculate loss on 1 March, why we compared price in 1 March with September futures price ?
Sorry for the long questions. Thank you in advance sir 🙂
1. Yes, both ways always give the same answer and both ways are fine in the exam.
2. In Nutourne the contract size is quoted in CHF. Nutourne uses $’s and is receiving CHF.
In Boullain, the contract size is quoted in €’s. Boullain uses €’s and is receiving $’s.3. $20 is the amount by which the margin (deposit) has to be change by for every 0.0001 movement in the futures price. 0.0001 x €200,000 (contract size) = €20.
4. I don’t know what loss you are referring to. They are dealing in September futures because the receipt is on 31 August. The price of September futures on 1 March is 1.1422.
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