The futures price of gold is $ 1,750. Futures contracts are for 100 ounces of gold, and
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Question:
The futures price of gold is $ 1,750. Futures contracts are for 100 ounces of gold, and the margin requirement is $ 5,000 a contract. The maintenance margin requirement is $ 1,500. You expect the price of gold to rise and enter into a contract to buy gold.
a) How much must you initially remit?
b) If the futures price of gold rises to $ 1,755, what is the profit and percentage return on your position?
c) If the futures price of gold declines to $ 1,748, what is the loss and percentage re-turn on the position?
d) If the futures price falls to $ 1,738, what must you do?
e) If the futures price continues to decline to $ 1,710, how much do you have in your account?
f) How do you close your position?
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