Question
A Widget futures contract is for 15,000 and the current price for a 6-month contract is $6.325. The initial margin requirement is $6,500 and the
A Widget futures contract is for 15,000 and the current price for a 6-month contract is $6.325. The initial margin requirement is $6,500 and the minimum maintenance margin is $4,500. The price fluctuations over the first 10 days of ownership are shown below.
Calculate the equity value of the account for each day. Identify the days, if any, when the equity falls below the minimum and the dollar amount of any calls that would be issued to the investor.
Price on the date of purchase: $6.325
Day 1 $6.327
Day 2 $6.331
Day 3 $6.292
Day 5 $6.207
Day 5 $6.215
Day 6 $6.187
Day 7 $6.136
Day 8 $6.244
Day 9 $6.291
Day 10 $6.361
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started