Question
The price of corn futures is $ 2.00. The contracts are for 10,000 bushels, making it a $ 20,000 contract. The margin requirement is $
The price of corn futures is $ 2.00. The contracts are for 10,000 bushels, making it a $ 20,000 contract. The margin requirement is $ 2,000 for each contract, and the maintenance margin requirement is $ 1,200 for each contract. A speculator expects the price of corn to fall; in this way, he initiates a contract to sell corn. How much should you remit before the speculator? If the futures price is $ 2.13, what should the speculator do? If the futures price increases to $ 2.14, how much does the speculator have in the account? Futures markets are used for the ability to "discover prices", among other things. In other words, the price of the future reflects the current consensus of investors regarding the price of the basic product. Based on this premise, solve the following exercise: The current price of gold is $ 950, but the price is expected to rise to $ 1,000. If the futures prices would be $ 990, what would you do? If your expectation is met, what would your profit be? 2. If the futures prices would be $ 1,018, what would you do? What price must futures have to cause you to take no action? Why? The current price of wheat is $ 3.70 and the costs to transport it (combined cost of shipping, insurance and storage) total 20% of the price. Based on this information, state what the price of wheat should be after one year. What would you do if the futures price was $ 4.55?
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