You enter into a long position in one gold futures contract worth $500 per ounce. Contract size

Fantastic news! We've Found the answer you've been seeking!

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 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?

Posted Date: May 13, 2024 03:22 AM

See More Questions

KYC's stock price can go up by 15 percent every year, or down by 10 percent. Both outcomes are equally likely. The risk free rate is 5 percent, and the current stock price of KYC is 100. (a) Price a...
Vito Co.'s next dividend is expected to be $4.50. Dividend growth is estimated at 20%, 15%, 8% for the following three years, and then stabilize to 2%. How much are you willing to pay to buy one...
Three banks that are wholly owned by the Republic of Costa Rica had issued promissory notes, payable in U.S. dollars in New York City. The notes are now in default due solely to actions of the Costa...
In your personal circumstances at this point in time, which would you prefer - a defined benefits plan or a defined contributions plan? Explain
Let f be the Taylor polynomial P(x) of order 7 for tan x about x = 0. Then it follows that, if-0.5 tan x ifx <0 but 0 (E) f(x) tan x if x>0 Replace the first sentence in Question by "Let f be the...
Discuss the approach of feminist anthropology. What has feminist anthropology contributed to ethnographic studies?
Explain what arbitrageurs would do if the price of an American S\&P 500 futures put with an exercise price of 2,200 were priced at 45 when the underlying futures price was trading at 2,150 . What...
Using a specific example, describe what is meant by a multinational corporation. What are the processes by which a multinational corporation can affect the processes of both individual national...
When might it be desirable to have some amount of idle time at a workstation?
Thomas Wade, CPA/PFS provides Form ADV Part II (Brochure Rule) to all potential clients. Which of the following items of information does not have to appear in the brochure? A. Educational...

You enter into a long position in one gold futures contract worth $500 per ounce. Contract size

Question:

Expert Answer:

To determine the price change required for a margin call we need to calculate the amount of equity t... View the full answer

Students also viewed these finance questions