Suppose an investor placed an order to take a long position in 10 March gold futures contracts on February 16. Assume that at the time the order was executed, the March gold futures price was 1,980 dollars per troy ounce. The size of each contract is 100 troy ounces. The broker required the investor to post an initial margin of $2,500 per contract. The broker also informed the investor that the maintenance margin is $1,000 per contract.

a) What was the balance of the margin account if the investor just had enough margin to open the 10 contracts?

b) The price of gold was $1,990 per ounce at the end of February 17. What was the balance of the margin account? How much could be withdrawn from the account?

c) The price of gold was $1,960 per ounce at the end of February 18. Assume the investor did not withdraw money from the account in previous days, would the investor receive a margin call? If there was a margin call, how much was needed to restore the account back to the initial margin balance?

d) If the investor decided to use forward contracts instead of futures contracts. Would the investor receive margin calls before the forward contracts; expiration date?