Question
You enter into a long position in one gold futures contract worth $500 per ounce. Contract size is 100 ounces. The initial margin is $2,500
You enter into a long position in one gold futures contract worth $500 per ounce. Contract size is 100 ounces. The initial margin is $2,500 per contract and the maintenance margin is $1,500 per contract. How much will the price of gold have to change for you to receive a margin call and will it need to increase or decrease?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To determine the price change required for a margin call we need to calculate the amount of equity t...
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Financial management theory and practice
Authors: Eugene F. Brigham and Michael C. Ehrhardt
13th edition
1439078106, 111197375X, 9781439078105, 9781111973759, 978-1439078099
