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What are the main differences between Futures and Forward Contracts contracts that would lead you to choose one over the other? Give examples for either
What are the main differences between Futures and Forward Contracts contracts that
would lead you to choose one over the other? Give examples for either scenario.
b Suppose that you enter into two short Futures contracts to sell a commodity for $
in months. The size of the contract is units of the commodity. You transferred
the total required initial margin of $ to your broker. The maintenance margin
for each of these contracts is $
i What is the change in the Futures price that will trigger a margin call? Assume
these are the only contracts you own and that your margin account hold only the
required initial margin. What happens if you do not meet the margin call?
ii What is the minimum change in the Futures price so you can withdraw $
from your margin account?
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