An US agent will receive 1 millions TL in 6 month time and wants to...
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Accounting
An US agent will receive 1 millions TL in 6 month time and wants to convert them in $. This agent hedges his position against adverse evolution of S/TL by entering into December S/TL Future contract at price 7.40. 10% of initial margin is required and 70% of maintenance margin. a) Determine the initial and maintenance margin amounts. b) Determine the pald/receive amounts through the daily settlement given the following observed settlement Fx future price. Future price Time 1 2 3 4 5 7.4 765 7.95 7.5 735 7.15 7 725 6 7 8
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