Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The New York Commodity Exchange (COMEX) trades futures contracts in gold. Each contract is for 100 ounces of gold. Assume that on Monday, June 3

image text in transcribed

image text in transcribed

The New York Commodity Exchange (COMEX) trades futures contracts in gold. Each contract is for 100 ounces of gold. Assume that on Monday, June 3 you buy ONE December gold futures contracts. When you make the purchase the futures price is $400 per ounce. The initial Margin is $2,000 per contract and the maintenance margin is $1.500 per contract. At the end of each trading day, your margin account is marked to market" to reflect gains and losses due to price changes over the day. Fill in the following table showing what happens to your margin account over the following few days. Day Futures Price Daily Gains Cumulative Gains Margin Margin Call (S/ounce) or (Losses) / (Losses) Account Balance $400.00 $4,000 June 3 397.00 June 4 396.10 June 5 398.20 June 6 397.10 June 7 396.70 June 10 395.40 June 11 393.30 What is the amount of the margin call on June 11? What is the amount of the margin call on June 11? Select one: a. 5670 b. $1.340 c. $1.260 O d. None of the above are true

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

Global Business Today

Authors: Charles Hill

7th Edition

0078137217, 9780078137211

More Books

Students also viewed these Finance questions

Question

Do not go, wait until I come

Answered: 1 week ago

Question

Pay him, do not wait until I sign

Answered: 1 week ago