company enters into 2 long futures contracts on a commodity for 200 cents per unit. Each contract is on 10,000 units of the commodity. The initial margin per contract is $2,500 and the maintenance margin per contract is $2,000. At what futures price will the balance in the margin account equal maintenance margin? a. 205 cents. b. 195 cents. c. 190 cents.
company enters into 2 long futures contracts on a commodity for 200 cents per unit. Each contract is on 10,000 units of the commodity. The initial margin per contract is $2,500 and the maintenance margin per contract is $2,000. At what futures price will the balance in the margin account equal maintenance margin? a. 205 cents. b. 195 cents. c. 190 cents.
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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A company enters into 2 long futures contracts on a commodity for 200 cents per unit. Each contract is on 10,000 units of the commodity. The initial margin per contract is $2,500 and the maintenance margin per contract is $2,000.
At what futures price will the balance in the margin account equal maintenance margin?
a.
205 cents.
b.
195 cents.
c.
190 cents.
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