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1. A trader enters into 2 short futures contracts for 5,000 bushels of wheat per contract with futures price being $2.50/bushel. The initial margin per

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1. A trader enters into 2 short futures contracts for 5,000 bushels of wheat per contract with futures price being $2.50/bushel. The initial margin per contract is equal to $2,500 and the maintenance margin per contract is equal to $1,500. The trader has S5,000 in his margin account just before the next settlement. How much can the futures price rise before this trader gets a margin call? A. 2.75 B. 2.70 C. 2.60 D. 2.55 E. 2.80 2. Consider an investor with a position consisting of 1 long European call and 1 long European put, both having strike price of $50. The current underlying asset price is $50 The call price is $3 and the put price is S2. With this position, if the stock price at maturity is aboveAND below , the investor CANNOT make a profit A. 45, 55 B. 48, 53 C. 55, 45 D. 45, 55 E. 53, 48

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