Question
A speculator believes that the share price at the BMSB will be al a downward direction in the near future. You asked your broker to
A speculator believes that the share price at the BMSB will be al a downward direction in the near future. You asked your broker to short 30 KLCI futures contracts at a price of 855. Based on the information given below and assuming that you are required to pay initial margin of RM3.000 per contract and maintain 85% of it:
Date Settlement Price (RM)
November 6 (Entry) 855
November 7 870
November & 836
November 9 862
November 10 853
November 11 840
Prepare your marked-to-market position.
Is there any margin call?
Calculate the leverage effect on the fifth day of trading.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
SOLUTION First lets calculate the markedtomarket position of the short futures posi...
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Financial Reporting Financial Statement Analysis And Valuation A Strategic Perspective
Authors: James M Wahlen, Stephen P Baginskl, Mark T Bradshaw
7th Edition
9780324789423, 324789416, 978-0324789416
