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You are shorting a futures contract on corn, where the current spot price per bushel is $4.00. The contract will expire in three months, and
You are shorting a futures contract on corn, where the current spot price per bushel is $4.00. The contract will expire in three months, and the current risk-free rate is 5%. The contract requires delivery of 5,000 bushels of corn, and you must put up 15% initial margin, with 10% maintenance margin. If you closed your account after that first day by going long the same futures contract (a reversing trade), what will be the percent profit or loss you earned on this investment? A)-3.29% B)3.29% C)3.33% D)-3.33%
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