Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose the initial margin on heating oil futures is $20,400, the maintenance margin is $18,000 per contract, and you establish a long position of 10

image text in transcribed

Suppose the initial margin on heating oil futures is $20,400, the maintenance margin is $18,000 per contract, and you establish a long position of 10 contracts today, where each contract represents 29,000 gallons. Tomorrow, the contract settles down $.04 from the previous day's price. What is the maximum price decline on the contract that you can sustain without getting a margin call? (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 3 decimal places.) Margin call cents per gallon

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions

Question

Differentiate the function. r(z) = 2-8 - 21/2 r'(z) =

Answered: 1 week ago