Paola and Sofiyat have taken a short position in one Chicago Board of Trade Treasury Bonds futures contract with a fce value of $100'000 at a price of 96-6/32. The initial margin requirement is $2'700 and the maintenance margin is $2'000. Paola and Sofiyat would meet all margin calls but would not withdraw any excess margin.

1. Complete the Table below and provide an explanation of any funds ceposited . Assume that the contract is purchased at the settlement price of the day hence no mark-to market profit or loss on the day of purchase (TIP 96 - 6/32 means the price is at 6/32 = 187.50 hence price stands at $96'187.50 (5% marks)

Day Beg. Balance, Funds Deposited. Futures Price. Price Change. Gain/ Loss. End Bal.

1. 96-06

1 96-31 25/32 (781.25)

2 97-22

3 97-18

4 97-24

5 98-04

6 97-31

b). How much are Paolas total gains or Losses by the end of day 6 ?