2 Question 11 (12 points) 5 6 A company enters into a short futures contract to sell 5.000 bushels of wheat for 250 cents per bushel. The initial margin is $3,000 and the maintenance margin is $2,000. a) What price would lead to a margin call? 8 9 b) Under what circumstances (ile, price level) could $1,500 be withdrawn from the margin account (ie, making profits of $1500)? 12 Format V B I 14 Question 12 (8 points) An investor with $1.000 to invest feels that a stock price will increase over the next months. The current stock price is $20 and the price of a 3-month call option with a strike of its $1. Mou have tivo alternative strategies: 1)buy shares of stocks 2)buy the call options. For each alternat a) What is the total gain or loss if the stock prich turns out to be Buying Stock Buying option What is the total rain of rice turns out le sal