Question
Suppose that an investor enters into a futures contract to buy platinum for $16.80 per ounce. The size of the contract is 5,000 ounces. The
Suppose that an investor enters into a futures contract to buy platinum for $16.80 per ounce. The size of the contract is 5,000 ounces. The initial margin is $3,000, and the maintenance margin is $1,000. Regarding a futures price that the investor will receive a margin call and the additional amount of money that the investor needs to deposit, which of the following statements is the most accurate?
a.
A futures price of $17.20; the additional amount of $2,000
b.
A futures price of $17.20; the additional amount of $3,000
c.
A futures price of $16.40; the additional amount of $3,000
d.
A futures price of $16.40; the additional amount of $2,000
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