Question 3

You took a long futures position in 10 contracts, covering each 100 ounces of gold at a price of $269.5 per ounce. The initial and the maintenance margin requirement are respectively $1500 and is $1100 per contract. No withdrawal in any excess margin will be made. Ignore any interest on the balance. (a) What is the maintenance margin amount on your position? [5] (b) The settlement prices per ounce of gold at the end of days 1,2,3,4 and 5 are respectively $278,$281,$265,$266.5 and $270.5. Complete the table below assuming the contract is purchased at the settlement price of that dav. 201 (c) Indicate whether you've made a gain or a loss and calculate the 5-day return/loss, on your position. (d) Calculate the discrete annualized return/loss. [5] [5]