At what cut-off settlement price will you get a margin, Financial Management

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At what cut-off settlement price will you get a margin

1. Suppose the current spot rate is USD 1 = MXN 20. A put option with a strike price of $0.0525 is ___________ and a put option with a strike price of $0.0475 is __________.

A) in the money, in the money

B) out of the money, out of the money

C) out of the money, in the money

D) in the money, out of the money

E) need to know the option premiums to answer the question

2. Yesterday, you entered into a futures contract to buy €62,500 at $1.35/€ (that is €1 = $1.35). Your initial margin was $3,750. Your maintenance margin requirement is $2,000. At what cut-off settlement price will you get a margin call?

A) $1.3220/€

B) $1.3780/€

C) $1.4720/€

D) $1.5280/€

E) None of the above

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Financial Management: At what cut-off settlement price will you get a margin

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Financial Management: At what cut-off settlement price will you get a margin

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