Question
Make a consideration for a hypothetical futures contract in which the current price is k212. The initial margin required being k10, and the maintenance margin
Make a consideration for a hypothetical futures contract in which the current price is k212. The initial margin required being k10, and the maintenance margin that required is k8. You long 20 contracts and meet all margin calls without withdrawing any excess margin. Required: i. When could there be a margin call and whats the difference between an Initial and maintenance margin ii. Complete the table below and explain any funds deposited. Assume that the contract is purchased at the settlement price of that day so there is no mark to market profit or loss on the day of purchase. iii. How much are your total gains or losses by the end of day 6?
\begin{tabular}{|l|l|l|l|l|l|l|} \hline Day & Beginningbalance & Fundsdeposited & FuturesPrice & Pricechanges & Gain/Loss & EndingBalance \\ \hline 0 & & & 212 & & & \\ \hline 1 & & & 211 & & & \\ \hline 2 & & & 214 & & & \\ \hline 3 & & & 209 & & & \\ \hline 4 & & & 210 & & & \\ \hline 5 & & & 204 & & & \\ \hline 6 & & & 202 & & & \\ \hline \end{tabular} \begin{tabular}{|l|l|l|l|l|l|l|} \hline Day & Beginningbalance & Fundsdeposited & FuturesPrice & Pricechanges & Gain/Loss & EndingBalance \\ \hline 0 & & & 212 & & & \\ \hline 1 & & & 211 & & & \\ \hline 2 & & & 214 & & & \\ \hline 3 & & & 209 & & & \\ \hline 4 & & & 210 & & & \\ \hline 5 & & & 204 & & & \\ \hline 6 & & & 202 & & & \\ \hline \end{tabular}
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