Ryan McGuireSuppose that on 01-Feb-2024, a financial manager takes a long position in 200 Oil Future contracts that expire in June-2024 at a future price of$95.00 per barrel. Each Oil Future contract calls for the delivery of 1,000 barrels. The initial Margin and Maintenance margins are 12% and 5% ofthe initial face value of the contract, respectively, based on the number of contracts, the number of underlying assets per contract, and the futureprice on the settlement date (200 x 1,000 x $95.00).The manager holds the contract for 10 business days and needs to calculate their margin account balance for each day based on the provided dailyprices for the respective Oil Future contract per barrel. Additionally, determine whether a Margin Call has occurred and, if so, calculate the valuethat the manager needs to deposit.Initial MarginMaintenance MarginDayContract OpeningD+1D+2D+4D+5D+6D+7D+8D+9D+10Future Price/ perUnderlying Asset$$$$$$$$$$95.0094.0094.0093.0092.0091.0088.0088.5090.0092.00Change in Price-1.00Total Gain/Loss-1.00What is the profit or loss of the manager's future contract position in Oil?Margin Acc.BalanceMargin Call? Yesor NoAmount to bedeposited.

Initial Margin Requirement: Initial Margin = Number of Contracts * Number of Barrels per Contract *…

Answered: D-2024, a financial manag Oil Future…

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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2. On January 1, 2022, ABC Corporation entered into a 60-day put option contract for $30,000. Based on the PHP-USD rates below, what is the intrinsic value of the contract on Mar. 2, 2022? January 1, 2022 Spot Rate 30-day Forward Rate 60-day Forward Rate January 30, 2022 Spot Rate 30-day Forward Rate 60-day Forward Rate Mar. 2, 2022 Spot Rate 30-day Forward Rate 60-day Forward Rate Buying Rate 55.10 55.41 55.93 Buying Rate 55.38 55.71 56.04 Buying Rate 55.88 55.93 55.95 Selling Rate 55.67 55.43 55.96 Selling Rate 55.75 56.17 56.61 Selling Rate 55.73 55.79 55.82
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7...new...continue b Sage Industries and Pronghorn Inc. enter into an agreement that requires Pronghorn Inc. to build three diesel-electric engines to Sage’s specifications. Upon completion of the engines, Sage has agreed to lease them for a period of 10 years and to assume all costs and risks of ownership. The lease is non-cancelable, becomes effective on January 1, 2020, and requires annual rental payments of $405,443 each January 1, starting January 1, 2020.Sage’s incremental borrowing rate is 8%. The implicit interest rate used by Pronghorn and known to Sage is 7%. The total cost of building the three engines is $2,685,000. The economic life of the engines is estimated to be 10 years, with residual value set at zero. Sage depreciates similar equipment on a straight-line basis. At the end of the lease, Sage assumes title to the engines. Collectibility of the lease payments is probable. (b) Prepare the journal entry to record the transaction on January 1, 2020, on the books of…
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Produc 13 Payne Oil Company began operations during 2019. The following information is as of 12/31/19 and early 2020. Expense lifting costs as lease operating expense. Transactions, 2019 Lease A Lease B Lease C *a. Acquisition costs of unde- veloped leases (1/8 RI) $ 60,000 $ 30,000 $ 40,000 90,000 *b. G&G costs 60,000 50,000 *c. Drilling costs d. Drilling results: 200,000 230,000 Drilling completed; dry 250,000 Drilling not completed Drilling completed 700,000 bbl 300,000 bbl (as of 12/31) Proved reserves Proved developed reserves e. Production f. Lifting costs December 31 10,000 bbl $ 250,000 Recorded DD&A Impaired lease 40% g. Transactions, 2020 h. Assume on January 2 of the second year (2020) that disaster struck both Lease A and Lease B. Give the entries to record abandonment of Lease A and Lease B. Assume equipment costing $15,000 was salvaged from Lease A. Assume this is not a post-balance sheet event that would give rise to changes in the balance sheets or income statements of…
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7..new.continue..c-d Sage Industries and Pronghorn Inc. enter into an agreement that requires Pronghorn Inc. to build three diesel-electric engines to Sage’s specifications. Upon completion of the engines, Sage has agreed to lease them for a period of 10 years and to assume all costs and risks of ownership. The lease is non-cancelable, becomes effective on January 1, 2020, and requires annual rental payments of $405,443 each January 1, starting January 1, 2020.Sage’s incremental borrowing rate is 8%. The implicit interest rate used by Pronghorn and known to Sage is 7%. The total cost of building the three engines is $2,685,000. The economic life of the engines is estimated to be 10 years, with residual value set at zero. Sage depreciates similar equipment on a straight-line basis. At the end of the lease, Sage assumes title to the engines. Collectibility of the lease payments is probable. (c) Prepare the journal entry to record the transaction on January 1, 2020, on the books of…

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D-2024, a financial manag Oil Future contract calls E the contract, respectivel- date (200 x 1,000 x $95.0 contract for 10 business e Oil Future contract per