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b. On May 2020, Alex call his broker to buy five gold futures contracts with the nominal amount of 100 ounces of gold on FE
b. On May 2020, Alex call his broker to buy five gold futures contracts with the nominal amount of 100 ounces of gold on FE Commodity Exchange with the futures' price of RM400 per ounce. There is 30% margin and monthly settlement. The maintenance margin is 27% and the annual continuously compounded rate of return is 3%. Given that the future prices of gold are listed in Table 1: Months June July August September October November Gold Future price (RM) 410 402 397 400 385 X Table 1 i. Determine the balance in Alex's margin account after settlement in October. (7 marks) ii. Calculate the total amount that Alex need to deposit into the margin account from June to October after receiving the margin call. (2 marks) iii. Determine the minimum November future price of gold, X which would lead to a margin call. (4 marks)
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