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Arte-miy333 [17]
3 years ago
14

ease answer the question below based on the closing spot and the July futures contract prices for euros for four consecutive day

s in March 20XX. No calculations are necessary. Date 3/01 3/02 3/03 3/04 Euro Spot Price $1.1585 $1.1589 $1.1584 $1.1593 July euro Futures Contract Price $1.1850 $1.1812 $1.1823 $1.1820 If a person sold euro futures on _____ then he/she will post a profit on ____ :
Business
1 answer:
kherson [118]3 years ago
5 0

Answer:

If a person sold euro futures on <u>3/01</u> then he/she will post a profit on <u>3/02</u> :

Explanation:

Date                                                    3/01        3/02       3/03       3/04

Euro Spot Price                              $1.1585   $1.1589  $1.1584   $1.1593

July euro Futures Contract Price  <u>$1.1850</u>   <u>$1.1812</u>   $1.1823   $1.1820

On March 1, the price of the euro futures contract was $1.1850 per euro, which means that a €1,000 contract is worth $1,185.50. On March 2, the euro futures contract was worth less, only $1.1812 per euro, that means that a €1,000 contract is worth $1,181.20. So you could have earned $1,185.50 - $1,181.20 = $4.30 per contract. It doesn't seem much, but it represents a 0.36% gain in one day.

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