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On Sept. 29, 2020, Mike purchased a futures contract on silver for $6.07/Troy ounce. The size of the contract is 5,000 Troy ounces of silver.
On Sept. 29, 2020, Mike purchased a futures contract on silver for $6.07/Troy ounce. The size of the contract is 5,000 Troy ounces of silver. The initial margin requirement is 10%. Over the next three days, the price of silver futures changed as follows:
Calculate the amount of money in Mikes account at the end of each day.
Day | Price | Margin Account value |
2 | $6.10 | |
3 | $6.09 | |
4 | $6.03 | |
5 | $5.97 | |
6 | $6.03 |
If the maintenance margin is $2,700, will a margin call result? If so, on which day? How much will Mike be required to deposit into his account?
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