Question 1. Margin Account and Settlement (6 marks)

Suppose that you bought two one-year gold futures contracts when the one-year futures price of gold was US$1,340.30 per troy ounce. You then closed the position at the end of the sixth trading day. The initial margin requirement is US$5,940 per contract, and the maintenance margin requirement is US$5,400 per contract. One contract is for 100 troy ounces of gold. The daily prices on the intervening trading days are shown in the following table.

Day	Settlement Price
0	1340.30
1	1345.50
2	1339.20
3	1330.60
4	1327.70
5	1337.70
6	1340.60

Assume that you deposit the initial margin and do not withdraw the excess on any given day. Whenever a margin call occurs on Day t, you would make a deposit to bring the balance up to meet the initial margin requirement at the start of trading on Day t+1, i.e., the next day.

b. Fill the appropriate numbers in the blank cells in the following table.

Day	Settlement price per troy ounce	Mark-to-Market	Other Entries	Account Balance	Explanation	Margin Call? Y/N
0	$1340.30
1	$1345.50
2	$1339.20
3	$1330.60
4	$1327.70
5	$1337.70
6	$1340.60