For the futures contract the initial margin account is 2% of the fully funded future which is 50000$ and the maintenance margin is 75% of the initial margin. The future loses 1% of its value. Assuming I have an account the brokerage how much I will be forced to contribute to my account as a seller? 0 500 250 None of the Above

For the futures contract the initial margin account is 2% of the fully funded future which is 50000$ and the maintenance margin is 75% of the initial margin. The future loses 1% of its value. Assuming I have an account the brokerage how much I will be forced to contribute to my account as a seller? 0 500 250 None of the Above

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A futures contract will mature in one time step. The current return over one time-step is R = 1.01 and the underlying asset of the future contract is currently worth $27 and has up factor u = 1.1 and down factor d = 0.9. The margin account for the short side of this futures contract currently holds $16. How much will the margin account hold when the futures contract matures if the underlying asset increases in value?
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1)Demonstrate how a Margin Account operates for both the Long and the Short futures position using the following information (you do not need to adjust the values given for contract size or number of contracts): The initial margin is R30. The initial Futures price is R100. On Day 1 the price drops to R90. On Day 2 the price rises to R95. Fill in the correct monetary values for the margin account values (a) through to (f) in your answer booklet. Take care to show the signs (negative and positive) of your cash flows. LONG SHORT DAY 0 (a) (b) DAY 1 (c) (d) DAY 2 (e) (f)
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Three months ago, you sold a put option contract on Swiss franc with a strike price of $.60/SF and an option price of $.0060 per SF. Contract size is 10,000 SF. The option expires today when the value of Swiss franc is $.625. What is your total profit or loss on your investment? A. -$310 B. -$60 C. $0 D. $60
am. 122.
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