Three days ago, you entered into a futures contract to sell €62,500 at $1.50 per €. Over the past three days the contract has settled at $1.50, $1.52, and $1.54. How much have you made or lost? Multiple Choice a. Lost $0.04 per € or $2,500 b. Made $0.04 per € or $2,500 c. Lost $0.06 per € or $3,750

Question

Jorge Clarke

Business

2 June, 00:03

Three days ago, you entered into a futures contract to sell €62,500 at $1.50 per €. Over the past three days the contract has settled at $1.50, $1.52, and $1.54. How much have you made or lost? Multiple Choice a. Lost $0.04 per € or $2,500 b. Made $0.04 per € or $2,500 c. Lost $0.06 per € or $3,750

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Answers (1)

Know the Answer?

Nickolas · Answer 1

Option A is correct one.

Lost $0.04 per € or $2,500

Explanation:

Since we are selling the futures contract. Hence we will suffer loss i. e when the price is rising.

Hence total loss = (1.50-1.54) * 62500 = $2500