Question
Assume the following information is from a 3-month Gold Futures Contract (KBE) on BBJ. KBE closing price IDR 850.000/gram. Minimum contract amount: 1 kilogram Initial
Assume the following information is from a 3-month Gold Futures Contract (KBE) on BBJ. KBE closing price IDR 850.000/gram. Minimum contract amount: 1 kilogram Initial margin: 12% of the initial contract value. Minimum margin: 6% of initial contract value. a. Gold jewelery companies want to hedge against exposure to gold price fluctuations. What KBE position should be taken? (1%) b. If the company takes a 10 kg contract position, what is the initial margin to be deposited? (2%) c. Calculate the profit (loss) of a 1 kg KBE short position if tomorrow the KBE closing price IDR 840,000/gram. (2%) d. At what KBE price will a long position be subject to a margin call? (2%)
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