A company enters into a short futures contract to sell 10,000 units of a commodity for $0.5 per unit. The initial margin is $5000 and the maintenance margin is $3000. When will there be a margin call? Question 1Answer a. As soon as the futures price exceeds $0.7 per unit. b. As soon as the futures price exceeds $0.8 per unit. c. As soon as the futures price exceeds $0.5 per unit. d. As soon as the futures price exceeds $0.6 per unit.
A company enters into a short futures contract to sell 10,000 units of a commodity for $0.5 per unit. The initial margin is $5000 and the maintenance margin is $3000. When will there be a margin call? Question 1Answer a. As soon as the futures price exceeds $0.7 per unit. b. As soon as the futures price exceeds $0.8 per unit. c. As soon as the futures price exceeds $0.5 per unit. d. As soon as the futures price exceeds $0.6 per unit.
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
Related questions
Question
100%
A company enters into a short futures contract to sell 10,000 units of a commodity for $0.5 per unit. The initial margin is $5000 and the maintenance margin is $3000. When will there be a margin call?
Question 1Answer
a.
As soon as the futures price exceeds $0.7 per unit.
b.
As soon as the futures price exceeds $0.8 per unit.
c.
As soon as the futures price exceeds $0.5 per unit.
d.
As soon as the futures price exceeds $0.6 per unit.
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
Unlock instant AI solutions
Tap the button
to generate a solution
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education