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B. A trader shorts one July futures contracts on frozeu orange juice. The contract is for the delivery of 20,000 pounds of örange juice. The current futures price is 160 cents per pound, the initial margin is $6,000 per contract, and the maintenance margin is $2,000 per contract. If the futures price decreases to 159 cents per pound, what would be the balance in the trader's margin account after daily settlement? Select one: a. $5,800 O b. $2,200 O c. $1,800 O d. $6,200

B. A trader shorts one July futures contracts on frozeu orange juice. The contract is for the delivery of 20,000 pounds of örange juice. The current futures price is 160 cents per pound, the initial margin is $6,000 per contract, and the maintenance margin is $2,000 per contract. If the futures price decreases to 159 cents per pound, what would be the balance in the trader's margin account after daily settlement? Select one: a. $5,800 O b. $2,200 O c. $1,800 O d. $6,200

Essentials Of Investments
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
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8. A trader shorts one July futures contracts on frozen orange juice. The contract is for the delivery of 20,000 pounds of orange juice. The current futures price is 160 cents per pound, the initial margin is $6,000 per contract, and the maintenance margin is $2,000 per contract. If the futures price decreases to 159 cents per pound, what would be the balance in the trader's margin account after daily settlement? Select one: a. $5,800 O b. $2,200 c. $1,800 O d. $6,200
Transcribed Image Text:8. A trader shorts one July futures contracts on frozen orange juice. The contract is for the delivery of 20,000 pounds of orange juice. The current futures price is 160 cents per pound, the initial margin is $6,000 per contract, and the maintenance margin is $2,000 per contract. If the futures price decreases to 159 cents per pound, what would be the balance in the trader's margin account after daily settlement? Select one: a. $5,800 O b. $2,200 c. $1,800 O d. $6,200
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