6. Zack Wheat hasjust bought four September 5000-bushel corn futures contracts at $1.75 per bushel. The initial

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6. Zack Wheat hasjust bought four September 5000-bushel corn futures contracts at $1.75 per bushel. The initial margin requirement is 3%. The maintenance margin requiremen tis 80% of the initial margin requirement.

a. How many dollars in initial margin must Zack put up?

b. If the September price of corn rises to $1.85, how much equity is in Zack's commodity account?

c. If the September price or corn falls to $1.70, how much equity is in Zack's commodity account? Will Zack receive a margin call?

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Investments

ISBN: 9788120321014

6th Edition

Authors: William F. Sharpe, Gordon J. Alexander, Jeffery V. Bailey

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Question Posted: Jul 25, 2024 06:06 AM

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6. Zack Wheat hasjust bought four September 5000-bushel corn futures contracts at $1.75 per bushel. The initial

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Investments

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