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Q3. JD just opened the following futures position: Short 100 Wheat futures on the Chicago Board of Trade (CBT) for delivery on DEC 2022, at
Q3. JD just opened the following futures position: Short 100 Wheat futures on the Chicago Board of Trade (CBT) for delivery on DEC 2022, at the current futures market price: $4.50/bushel. The Initial margin is 2% and the maintenance (variable) margin is 75% of JD's initial equity. Each futures is for 5,000 wheat futures. 3.1 Calculate the opening value of JD's futures position 3.2 Calculate the initial margin and the variable margin. 3.3 Complete the following table: Day 0 denotes the day in which JD opens her futures position. Remember that if there is a margin call JD must deposit enough funds to bring the margin to the initial margin level. Day Market price 0 $4.50 Settlement Price $4.50 Marking to market $0 Margin account Margin call 1 $4.47 2 $4.43 3 $4.51 4 $4.53 5 $4.50 JD quits the market on day 5 at the market price of the DEC 2022 Wheat futures is: $4.50. Calculate JD' total equity in the margin account
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