Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

An investor takes a long position in 2 November gold futures contracts on July 10. The contract size is 100 oz. The current gold futures

An investor takes a long position in 2 November gold futures contracts on July 10. The contract size is 100 oz. The current gold futures price is US$1900. The initial margin requirement is US$5,000 per contract and maintenance margin is US$4,500/contract.

The following table shows the futures price at the close of the following dates:

Day

Date

Price

1

10-Jul

1896.00

2

11-Jul

1894.00

3

12-Jul

1901.00

4

13-Jul

1903.00

Choose all correct answers. Please note that each incorrect answer will reduce the score by 10%.

a.$1800can be withdrawn from theaccount at theclose of Day 3

b.You willget a margin call of $1500at the close on Day2

c.$2000can be withdrawn from theaccount at theclose of Day 3

d.$1400 can be withdrawn from the account at the close of Day 3

e.$1500can be withdrawn from theaccount at theclose of Day 3

f.You willget a margin call of $1800at the close on Day2

g.You will get a margin call of $1200at the close on Day2

h.You will notget a margin call at the close on Day 1

i.You willget a margin call at the close on Day1

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles of Managerial Finance

Authors: Lawrence J. Gitman, Chad J. Zutter, Wajeeh Elali, Amer Al Roubaix

Arab World Edition

1408271583, 978-1408271582

More Books

Students also viewed these Finance questions