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On the CBOT, the value of one DJIA futures contract is computed as $10 times the value ofthe Dow Jones Industrial Average, the minimum initial

On the CBOT, the value of one DJIA futures contract is computed as $10 times the value ofthe Dow Jones Industrial Average, the minimum initial margin is $7,005 and the maintenancemargin requirement is $5,604 per contract. If you bought one contract at 11,400 using theminimum initial margin and the price dropped 11,250 on an active trading day, compute thedaily percentage profit or loss in your margin account. How much must be deposited in yourmargin account to prevent liquidation of your position? How much would the DJIA have tofall in a single trading day to wipe you out?

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