Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

If investor sold seven contracts of June, 2012 corn. The price per bushel was $1.64, and each contract was for 5000 bushels.The initial margin deposit

If investor sold seven contracts of June, 2012 corn. The price per bushel was $1.64, and each contract was for 5000 bushels.The initial margin deposit is $2000 per contract with the maintenance margin at $1250.

i. How to I figure out the deposit on the investment?

ii. If the prices of the futures on the four days following the short sales were 1.60, 1.66, 1.70, and 1.75.

I need help calculating the current balance on each of the next four days.

iii. if after the 5th day the position is closed out what is the dollar loss/gain percentage and dollar amount

iv) suppose, the investor kept her position, and the futures price on the sixth day was 1.80, would the investor face a margin call? if so how much would she need to put up?

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

Contemporary Business Mathematics with Canadian Applications

Authors: S. A. Hummelbrunner, Kelly Halliday, Ali R. Hassanlou, K. Suzanne Coombs

11th edition

134141083, 978-0134141084

More Books

Students also viewed these Finance questions