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The futures price of gold is $1,000. Futures contracts are for 100 ounces of gold, and the margin requirement is $3,000 a contract. The maintenance
The futures price of gold is $1,000. Futures contracts are for 100 ounces of gold, and the margin requirement is $3,000 a contract. The maintenance market requirement is $1,500. A speculator expects the price of gold to rise and enters into a contract to buy gold.
| a. | How much must the speculator initially remit? |
| b. | If the futures price of gold rises to $1,005, what is the profit and return on the position? |
| c. | If the futures price of gold declines to $998, what is the loss on the position? |
| d. | If the futures price declines to $984, what must the speculator do? |
| e. | If the futures price continues to decline to $982, how much does the speculator have in the account? |
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