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The futures price of corn is $3.60 a bushel. Futures contracts for corn are based on 9,000 bushels, and the margin requirement is $2,000 a
The futures price of corn is $3.60 a bushel. Futures contracts for corn are based on 9,000 bushels, and the margin requirement is $2,000 a contract. You expect the price of corn to fall and sell the contract short.
- What is the value of the contract and how much must you initially remit? Round your answers to the nearest dollar.
Value of the contract: $
Remit amount: $
- If the futures price of corn rises to $3.75, what is the profit or loss on your position? Round your answer to the nearest dollar. Enter your answer as a positive value.
The -Select-profitlossItem 3 is $ .
- If the futures price of corn declines to $3.47, what is the profit or loss on your position? Round your answer to the nearest dollar. Enter your answer as a positive value.
The -Select-profitlossItem 5 is $ .
- If the futures price declines to $3.37, what may you do? Round your answer to the nearest dollar.
The investor may remove up to $ from the account.
- How do you close your position?
The investor closes the position by entering a contract to -- the commodity.
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