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Question 4 (20 marks) A trader sells four March futures contracts on corn. Each contract is for the delivery of 5,000 bushels. The current futures
Question 4 (20 marks) A trader sells four March futures contracts on corn. Each contract is for the delivery of 5,000 bushels. The current futures price is 385 cents per bushel, the initial margin is $1,000 per contract, and the maintenance margin is $700 per contract. (a) What price change would lead to a margin call? (10 marks) (b) Under what circumstances could $2,000 be withdrawn from the margin account? (10 marks)
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