It is now 15th June 2020, you are bullish on the gold price for the next 6 months and willing to speculate by using $197,000 to take the appropriate position in 6-month futures contract. The current spot price and December futures price of gold are $1,950 and $1,975 per ounce, respectively. Each contract is on 100 ounces of gold. The required initial margin is $9,850 per contract. The maintenance margin per contract is $7,350. At the end of the first day of trading, the futures contract settles at $1,990 per ounce. What is the balance of your margin account at the end of that day? $227,000 $197,000 None of the other answers O $167,000 $195,500

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
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It is now 15th June 2020, you are bullish on the gold price for the next 6 months and
willing to speculate by using $197,000 to take the appropriate position in 6-month
futures contract. The current spot price and December futures price of gold are $1,950
and $1,975 per ounce, respectively. Each contract is on 100 ounces of gold. The
required initial margin is $9,850 per contract. The maintenance margin per contract is
$7,350. At the end of the first day of trading, the futures contract settles at $1,990 per
ounce. What is the balance of your margin account at the end of that day?
$227,000
$197,000
None of the other answers
$167,000
O $195,500
Transcribed Image Text:It is now 15th June 2020, you are bullish on the gold price for the next 6 months and willing to speculate by using $197,000 to take the appropriate position in 6-month futures contract. The current spot price and December futures price of gold are $1,950 and $1,975 per ounce, respectively. Each contract is on 100 ounces of gold. The required initial margin is $9,850 per contract. The maintenance margin per contract is $7,350. At the end of the first day of trading, the futures contract settles at $1,990 per ounce. What is the balance of your margin account at the end of that day? $227,000 $197,000 None of the other answers $167,000 O $195,500
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