An investor enters into a short futures position in 10 contracts in gold at a futures price of R276.50 per ounce. The size of one futures contract is 100 ounce. The initial margin per contract is R1500 and the maintenance margin is R1100.

a) What is the initial size of the margin account?

b) Suppose the futures settlement price on the first day is R278.00 per oz. What is the new balance in the margin account? Does a margin call occur? If so, assume that the account is topped back to its original level.

c) The futures settlement price on the second day is R281.00 per oz. What is the new balance in the margin account? Does a margin call occur? If so, assume that the account is topped back to its original level.

d) On the third day, the investor closes out the short position at a futures price of R276.00. What is the final balance in his margin call?

e) Ignoring interest costs, what are the total gains or losses?