Question
An investor enters into a short futures position in 5 contracts in gold at a futures price of $1,775 per oz. The size of
An investor enters into a short futures position in 5 contracts in gold at a futures price of $1,775 per oz. The size of one futures contract is 100 oz. The initial margin per contract is $9,500, and the maintenance margin per contract is $6,900. Assume the following evolution of gold prices over the next five days, and compute the margin account assuming that you meet all margin calls. What is the total loss or profit if the investor closes out the position on 3/28/2016? Date Price 3/24/2016 $1,775 3/25/2016 $1,790 3/26/2016 $1,800 3/27/2016 $1,820 3/28/2016 $1,800
Step by Step Solution
3.32 Rating (149 Votes )
There are 3 Steps involved in it
Step: 1
Answer Short position 5 gold contract futures Future price 1775 pe...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 StartedRecommended Textbook for
Risk Management and Financial Institutions
Authors: Hull John
4th edition
1118955943, 978-1118955949
Students also viewed these Accounting questions
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
View Answer in SolutionInn App