Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The current price of gold is $1642 per troy ounce. Assume that you initiate a long position in 10 COMEX gold futures contracts at this

The current price of gold is $1642 per troy ounce. Assume that you initiate a long position in 10 COMEX gold futures contracts at this price on September 6th. This initial margin is 5% of the initial price of the futures, and the maintenance margin is 3% of the initial price. Assume the evolution of gold futures prices over the next four days and that you meet any margin calls. The gold futures contract size is 100 ounces. For each day, please compute your end of day margin balance.

image text in transcribed

The current price of gold is $1642 per troy ounce. Assume that you initiate a long position in 10 COMEX gold futures contracts at this price on September 6th. This initial margin is 5% of the initial price of the futures, and the maintenance margin is 3% of the initial price. Assume the evolution of gold futures prices over the next four days and that you meet any margin calls. The gold futures contract size is 100 ounces. For each day, please compute your end of day margin balance. Date September 6 September 7 September 82 September 9 September 10 Daily Settlement Price per Ounce 1642 16202 16052 16182 15902

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 Accounting The Impact On Decision Makers

Authors: Gary A Porter, Curtis L Norton

8th Edition

1111534861, 9781111534868

More Books

Students also viewed these Finance questions

Question

=+1. What are the core best practices for social care?

Answered: 1 week ago