Question
Assume Peter Inc. buys 3 class III milk futures contracts on March 26. The futures price is $20.01 per cwt and the contract size is
Assume Peter Inc. buys 3 class III milk futures contracts on March 26. The futures price is $20.01 per cwt and the contract size is 2,000 cwt per contract. The company sets up a margin account with initial margin of $2,025 per contract and maintenance margin of $1,500 per contract. The futures prices of the class III milk futures contracts vary as shown below.
On March 27, the futures price is $20.13 per ounce.
On March 28, the futures price is $19.86 per ounce
On March 29, the futures price is $19.53 per ounce
On March 30, the futures price is $19.79 per ounce
What is the amount in the margin account at the end of March 30?
| A. | $6,060 | |
| B. | $7,635 | |
| C. | $3,180 | |
| D. | $4,755 |
Assume Peter Inc. buys 3 class III milk futures contracts on March 26. The futures price is $20.01 per cwt and the contract size is 2,000 cwt per contract. The company sets up a margin account with initial margin of $2,025 per contract and maintenance margin of $1,500 per contract. The futures prices of the class III milk futures contracts vary as shown below.
On March 27, the futures price is $20.13 per ounce.
On March 28, the futures price is $19.86 per ounce
On March 29, the futures price is $19.53 per ounce
On March 30, the futures price is $19.79 per ounce
What is the variation margin needed on the day the company receives a margin call?
| A. | $2,880 | |
| B. | $3,195 | |
| C. | $1,980 | |
| D. | $1,620 |
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Personal Finance
Authors: Jeff Madura
4th Edition
0136117007, 9780136117001
