Yesterday, you entered into a futures contract to buy €62,500 at $1.50 per €. Your initial performance bond is $1,500 and your maintenance level is $500. At what settle price will you get a demand for additional funds to be posted?

The settle price at which you will get a demand for additional funds to be posted is $1.4840 per €.

Explanation:

Provided data from the question;

Futures contract to buy in euros = €62,500

Future contract to buy in dollar = $93,750 ( €62,500 × $1.50)

Initial performance of bond = $1,500

Maintenance level = $500

To determine the settle price at which you get a demand for additional funds to be posted =

Future contract to buy in dollar - (initial bond performance - maintenance level) ÷ future contract to in euros

$93,750 - ($1,500 - $500)

= $93,750 - $1,000

$92,750 ÷ €62,500

= $1.484

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