QUESTION 1

1. Suppose a trader is interested in longing in the futures market. In Day 0, the date the trader enters the market, the futures price was $100.What could be the maximum amount of loss the trader per contract?

QUESTION 2

Question 2-7are based on the followingseries of futures price(F(0),F(1),...F(6)):

Day 0:F(0)=$212

Day 1:F(1)=$211

Day 2:F(2)=$214

Day3:F(3)=$209

Day 4:F(4)=$210

Day5:F(5)=$202

Day6:F(6)=$200

Suppose you are going to long 20contracts.The initial margin=$10 per contract, and the maintenance margin is$2.

First Questionfrom the set of information: how much do you need to deposit in the trading account at Day 0?

QUESTION 3

Using the same set ofinformation from Question 2,what is the ending balance in Day 1?

QUESTION 4

1. Using the same set of information from Question 2,figure out what is the first day,on which,you receive margin call and need to put extra money into the trading account?

QUESTION 5

1. Using the same set of information from Question2, answering what is the additional fund that needs to put into account on Day 6?

QUESTION 6

Using the same set of information from Question2,answering what is the ending balance at Day 6?

QUESTION 7

1. Using the same set of information from Question2,answering which day has the largest gain among the 6 days?