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Please just answer B1 and B2, thank you! I'll give thumbs up! An investor buys 2 silver contracts (long position) on the Chicago Board of
Please just answer B1 and B2, thank you! I'll give thumbs up!
An investor buys 2 silver contracts (long position) on the Chicago Board of Trade (CBOT) on May 7 for delivery in July that same year. The following information relates to the silver contract and silver price on the date of purchase. Current futures contract price: Size of contract: Initial margin requirement: Maintenance margin: $15.00 per oz. 5000 oz. 5% of initial contract value 3.5% of initial contract value (A.) How much must the investor put down as initial margin (in dollars $) to take the position in the 2 silver contracts? Show all work, carrying all calculations out to four (4) decimal places. Highlight your answer in bold. (5 pts. (B.) By the end of trading on May 27 the price of silver has risen to $16.91. Based on this price move answer the following questions. (1.) What will be the dollar balance in the investor's margin account at the end of the trading day on May 27? (Assume that the investor has neither added to nor withdrawn funds from the margin account since taking the initial position on May 7. Show all work, carrying all calculations out to four (4) decimal places. Highlight your answer in bold. (3 pts. (2.) Will the investor suffer a margin call on this date? Briefly explain your answer. (2 pts. An investor buys 2 silver contracts (long position) on the Chicago Board of Trade (CBOT) on May 7 for delivery in July that same year. The following information relates to the silver contract and silver price on the date of purchase. Current futures contract price: Size of contract: Initial margin requirement: Maintenance margin: $15.00 per oz. 5000 oz. 5% of initial contract value 3.5% of initial contract value (A.) How much must the investor put down as initial margin (in dollars $) to take the position in the 2 silver contracts? Show all work, carrying all calculations out to four (4) decimal places. Highlight your answer in bold. (5 pts. (B.) By the end of trading on May 27 the price of silver has risen to $16.91. Based on this price move answer the following questions. (1.) What will be the dollar balance in the investor's margin account at the end of the trading day on May 27? (Assume that the investor has neither added to nor withdrawn funds from the margin account since taking the initial position on May 7. Show all work, carrying all calculations out to four (4) decimal places. Highlight your answer in bold. (3 pts. (2.) Will the investor suffer a margin call on this date? Briefly explain your answer. (2 ptsStep by Step Solution
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