1) March: an investor enters 10 futures contracts to buy 100 oz of gold @ $1200 per oz in April.

April: the price of gold is $1150 per oz. What is the investors profit or loss? What is the investors profit or loss if it was to sell?

2) A trader goes short at a futures price of $1000. The exchange requires an initial margin (IM) of 100 and a maintenance margin (MM) which is 50% of IM. Calculate profit or loss in each case

- At the end of the day 1, the futures price settles at $900.

- At the end of day 2, the futures price settles at $950.

- At the end of day 3, the futures price settles at $1030

- At the end of day 3, the futures price settles at $1090

3) Tiago is planning to sell 1 kilogram of gold in 90 days at a price of $35 000 to Gold LLP. What is the risk for Tiago?

After 90 days, the spot price of gold is $40 500 per kilo.

- What will be the Payoff to the long party at expiration?

- What will be the Payoff to the short party at expiration?