3. You take a long position in the Gold futures on 1/15 when the futures price is 1600/oz. Each contract is for a 100 oz. The initial margin is $10,000 and the maintenance margin is $6,000. Following your trade, the market moves in the following manner. Date 1/16 1/17 1/18 1/21 Settlement Price ($/oz) 1620 1580 1540 1490 1530 1/22 a. On what day(s) do you get a margin call and what are the amounts of the margin calls?

3. You take a long position in the Gold futures on 1/15 when the futures price is 1600/oz. Each contract is for a 100 oz. The initial margin is $10,000 and the maintenance margin is $6,000. Following your trade, the market moves in the following manner. Date 1/16 1/17 1/18 1/21 Settlement Price ($/oz) 1620 1580 1540 1490 1530 1/22 a. On what day(s) do you get a margin call and what are the amounts of the margin calls?

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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5. On June, an investor bought five (10 tons per contract) of soybean futures at $3,000 per ton. Assume the exchange set an initlal margin of 10% and a maintenance margin of 8%. If its settlement price falls to $2800 per ton, the variation margin should be ()? A. 6000 B. 6200 C. 9000 D. 10000
aa.1
1. Complete the following tables (the example from the course): We start with the assumption that the futures price is 100$ when the transaction opens, the initial margin requirement is 5$, and the maintenance margin requirement is 3$. Table 1. Holder of long position of 10 contracts Day Beginning Funds Settlement Futures price change (5) Gain/Loss (6) Ending balance (7) (1) balance (2) deposited (3) price (4) 0 100.00 99.20 96.00 101.00 103.50 103.00 6 104.00 Table 2. Holder of short position of 10 contracts Day Funds Settlement Beginning balance (2) Futures price change (5) Gain/Loss (6) Ending balance (7) (1) deposited (3) price (4) 0 100.00 1 99.20 2 96.00 3 101.00 4 103.50 5 103.00 6 104.00 2. Suppose that an European call option on 1000 shares has the strike price 22 $/share and the premium 0.8 $/share. a) What will be the buyer's payoff if the spot price at maturity is 23.1 $/share? Draw the diagram. b) What will be the seller's (writer) payoff if the spot price at maturity is…
You long a futures contract for 500 units of silver for $60 per unit. The initial margin is $3,000 and the maintenance margin is $2,000. What is the silver price at which you will receive a margin call? A.$62 B.$56 C.$58 D.$64
Consider a 6-months futures contract on gold. We assume no income and that $1 per ounce per 6-months to store gold, with the payment being made at the end of the period. The spot price is $1620 and risk free rate is 2% for all maturities. How can an arbitrageur earn profit is the price of 6-month gold futures is 1630$?
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 short 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?
1. Assume an investor takes a long position in 4 September KLSE CI futures contract on 15th July. The futures contract price is RM1623.00. The initial margin and maintenance margin are RM6,500 per contract and RM4,500.00 per contract respectively. The trader closes his position on the sixth day. The contract size is RM50 per contract. The futures settlement prices during those six days are: Day 1 RM1621 Day 2 RM1625 Day 3 RM1630 Day 4 RM1620 Day 5 RM1618 Day 6 RM1640 a. Determine the trader's total gains or losses. b. How much does the trader pay for margin call ? * Show all workings
Bitcoin futures You have entered a short position in a Bitcoin futures contract. The contract size is 1 bitcoin. The initial margin required is $15,000. The maintenance margin is $12,500. The contract is entered at market close on March 9 at a price of $48,800. The futures price is 49,100 on March 10. It is 52,300 on March 11. It is 47,700 on March 12. What is the final margin account balance on March 12? Date Futures Price Daily Gain/Loss Margin Call Mar 9 Mar 10 Mar 11 Mar 12 48,800 49,100 52,300 47,700 Numeric Response Margin Acct Balance
On January 1, you sold one February maturity S&P 500 Index futures contract at a futures price of 2,412. If the futures price is 2,480 at contract maturity, what is your profit? The contract multiplier is $50. (Input the amount as positive value.)
Suppose that you enter into a short futures contract to sell July silver for $27.20 per ounce. The size of the contract is 5,000 ounces. The initial margin is $4,000, and the maintenance margin is $ 3,000. What change in the futures price will lead to a margin call? What happens if you do not meet the margin call? Question 33 options: The price of silver must drop to $27.00 per ounce for there to be a margin call. If the margin call is not met, your broker closes out your position. The price of silver must rise to $27.40 per ounce for there to be a margin call. If the margin call is not met, your broker closes out your position. The price of silver must rise to $27.40 per ounce for there to be a margin call. If the margin call is not met, the position remains open until the margin declines to $0.0. The price of silver must drop to $26.20 per ounce for there to be a margin call. If the margin call is not met, your broker closes out your position. Please answer fast I give you upvote.
The spot price of silver is $11.00 per ounce and the futures expires in one year trades for $12.20, what is the implied cost of carry?
Refer to the Mini-S&P contract in Figure 22.1. Assume the closing price for this day.a. If the margin requirement is 23% of the futures price times the contract multiplier of $50, how much must you deposit with your broker to trade the March maturity contract? (Round your answer to the nearest whole dollar.)Required margin depositb. If the March futures price increases to 2594.70, what percentage return will you earn on your investment if you entered the long side of the contract at the price shown in the figure? (Do not round intermediate calculations. Round your answer to 2 decimal places.)Percentage return on net investment%c. If the March futures price falls by 1%, what is your percentage return? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.)Percentage return on net investment%

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