1. Assume a futures price of Php5000 at the start of the transaction, with Php250 initial margin requirement and a Ph150 maintenance margin requirement. The trader takes in a long position of 10 contracts. Marking- to-market process occurs over the period of seven trading days. A. Complete the table above for the holder of the long position. B. When could there be a margin call? C. How much are the total gains or losses by the end of day 7? Futures Beginning Balance Funds Settlement Ending Balance Day Price Gain/Loss Deposited Price Change 5000 4960 4800 1 2 3 5050 5175 4 5200 5250.50 5310.75 6 7 D. Complete the table above for the holder of the short position. Futures
1. Assume a futures price of Php5000 at the start of the transaction, with Php250 initial margin requirement and a Ph150 maintenance margin requirement. The trader takes in a long position of 10 contracts. Marking- to-market process occurs over the period of seven trading days. A. Complete the table above for the holder of the long position. B. When could there be a margin call? C. How much are the total gains or losses by the end of day 7? Futures Beginning Balance Funds Settlement Ending Balance Day Price Gain/Loss Deposited Price Change 5000 4960 4800 1 2 3 5050 5175 4 5200 5250.50 5310.75 6 7 D. Complete the table above for the holder of the short position. Futures
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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![1. Assume a futures price of Php5000 at the start of the transaction, with
Php250 initial margin requirement and a Ph150 maintenance margin
requirement. The trader takes in a long position of 10 contracts. Marking-
to-market process occurs over the period of seven trading days.
A. Complete the table above for the holder of the long position.
B. When could there be a margin call?
C. How much are the total gains or losses by the end of day 7?
Futures
Beginning
Funds
Settlement
Ending
Day
Price
Gain/Loss
Balance
Deposited
Price
Balance
Change
5000
1
4960
2
4800
3
5050
4
5175
5
5200
6
5250.50
7
5310.75
D. Complete the table above for the holder of the short position.
Futures
Beginning
Funds
Settlement
Ending
Day
Price
Gain/Loss
Balance
Deposited
Price
Balance
Change
5000
1
4960
2
4800
3
5050
4
5175
5
5200
6
5250.50
7
5310.75
Е.
How much are the total gains or losses by the end of day 7?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F966c32bb-b612-4b47-98c1-7eb0e9cd8caa%2F2546ae40-aae2-4c3a-bef7-f94f02fb6a89%2Fhtp01vj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:1. Assume a futures price of Php5000 at the start of the transaction, with
Php250 initial margin requirement and a Ph150 maintenance margin
requirement. The trader takes in a long position of 10 contracts. Marking-
to-market process occurs over the period of seven trading days.
A. Complete the table above for the holder of the long position.
B. When could there be a margin call?
C. How much are the total gains or losses by the end of day 7?
Futures
Beginning
Funds
Settlement
Ending
Day
Price
Gain/Loss
Balance
Deposited
Price
Balance
Change
5000
1
4960
2
4800
3
5050
4
5175
5
5200
6
5250.50
7
5310.75
D. Complete the table above for the holder of the short position.
Futures
Beginning
Funds
Settlement
Ending
Day
Price
Gain/Loss
Balance
Deposited
Price
Balance
Change
5000
1
4960
2
4800
3
5050
4
5175
5
5200
6
5250.50
7
5310.75
Е.
How much are the total gains or losses by the end of day 7?
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