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1.5 pts. For the problem below, calculate the daily account balance and the debit or credit and determine if there would be a margin call

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1.5 pts. For the problem below, calculate the daily account balance and the debit or credit and determine if there would be a "margin call for each of the given days. In reality your account balance would probably fluctuate daily. That does not mean you would have daily margin calls, however. I have omitted days for the purpose of example. This is based on a CME Lean Hog contract (40,000 lbs.). The initial margin level is $2000/contract, and the maintenance margin level is $1600/contract. Day Market Action Market Change Debit/Credit Account Margin From Previous To Account Balance Call Day Amount Day 1 Open Account $2000 $2000 $0 Deposit $2000 - Take no market Action Day 2 Sell/Short 1 July Lean Hog @ $63.00/cwt Day 20 July Lean Hogs settled - $2.30 @ $60.70/cwt Day 40 July Lean Hogs settled + $4.10 @ $64.80/cwt Day 60 July Lean Hogs settled - $4.30 @ $60.50/cwt Day 80 July Lean Hogs settled - $1.00 @$59.50/cwt Day 110 July Lean Hogs settled + $0.40 @ $59.90/cwt Day 120 Buy/Long 1 July Live Hog - $6.20 Contract 2. 5 pts. For this problem below, the same situation is assumed as for problem 1 above except in this scenario, your initial position is a long. Calculate the daily account balance and the debitor credit and determine if there would be a "margin call for each of the given days. Again, this is based on a CME Lean Hog contract (40,000 lbs.). The initial margin level is $2000/contract, and the maintenance margin level is $1600/contract. Day 20 Day Market Action Market Change Debit/Credit Account Margin From Previous To Account Balance Call Day Amount Day 1 Open Account $2000 $2000 $0 Deposit $2000 - Take no market Action Day 2 Buy/Long 1 July Lean Hog @ $63.00/cwt July Lean Hogs settled - $2.30 @ $60.70/cwt Day 40 July Lean Hogs settled + $4.10 @ $64.80/cwt Day 60 July Lean Hogs settled - $4.30 @ $60.50/cwt Day 80 July Lean Hogs settled - $1.00 @$59.50/cwt Day 110 July Lean Hogs settled + $0.40 @ $59.90/cwt Day 120 Sell/Short 1 July Live Hog - $0.20 Contract

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