Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose the initial margin on heating oil futures is $ 1 2 , 6 0 0 , the maintenance margin is $ 1 0 ,

Suppose the initial margin on heating oil futures is $12,600, the maintenance margin is $10,000 per contract, and you establish a long position of 19 contracts today, where each contract represents 37,000 gallons. Tomorrow, the contract settles down $.11 from the previous days price. What is the maximum price decline on the contract that you can sustain without getting a margin call?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Recommended Textbook for

Financial Management For Nurse Managers And Executives

Authors: Cheryl Jones, Steven A. Finkler, Christine T. Kovner

4th Edition

1455700886, 9781455700882

More Books

Students also viewed these Finance questions

Question

What applied experiences do you have? (For Applied Programs Only)

Answered: 1 week ago

Question

Explain the relationship between language and culture

Answered: 1 week ago

Question

Compare and contrast elaborated and restricted codes

Answered: 1 week ago