You have gone long $4$ September CPO future contracts. The future price is now K$1,800$ per ton. Assuming counterparty has the same total value, determine the daily making $-$ to $-$ market adjustment to the account and the balance on the $5^{th}$ day.

Contract size $=25$ tons

Initial margin $=10\%$ of total value

Maintenance Margin $=70\%$ of initial margin.

Questions

What is the value per contract $(2$ Marks$)$

ii$.$ What is the total contract value $(2$ Marks$)$

iii. Complete the table below $(10$ Marks$)$

$\backslash$table$[[$Day$,\backslash$table$[[$Beginning$],[$balance$]],\backslash$table$[[$Funds$],[$deposited$]],\backslash$table$[[$Futures$],[$Price$]],\backslash$table$[[$Price$],[$changes$]],$Gain$/$Loss$,\backslash$table$[[$Ending$],[$Balance$]]],[0,,,1800,,,],[1,,,1820,,,],[2,,,1790,,,],[3,,,1770,,,],[4,,,1800,,,],[5,,,1810,,,]]$

iv$.$ What is the total Gain$/$Loss for the position $(4$ Marks$)$

v$.$ If the main difference between a forward and future contract is that future is standardized and market traded, how are future contract superior to forwards? $(5$ marks$)$