Question 2 Not yet answered Marked out of 10.00 Flag question The investor takes a long...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Question 2 Not yet answered Marked out of 10.00 Flag question The investor takes a long position in two futures contracts for orange juice. Each contract amounts to 15000 units of the underlying. The current contract price is 1.60 PLN / unit of the underlying. The initial margin is 6000 PLN per contract while the maintenance margin is 4500 PLN per contract. Both margins are constants! a) What price change of the contract will cause a margin call? b) Under what circumstances will the investor be able to withdraw 2000 PLN from the deposit account without closing the position? c) What should the price on the underlying (spot) market be so that the investor would have a profit at the time of exercising the contract? Explain shortly the role of margins. Question 2 Not yet answered Marked out of 10.00 Flag question The investor takes a long position in two futures contracts for orange juice. Each contract amounts to 15000 units of the underlying. The current contract price is 1.60 PLN / unit of the underlying. The initial margin is 6000 PLN per contract while the maintenance margin is 4500 PLN per contract. Both margins are constants! a) What price change of the contract will cause a margin call? b) Under what circumstances will the investor be able to withdraw 2000 PLN from the deposit account without closing the position? c) What should the price on the underlying (spot) market be so that the investor would have a profit at the time of exercising the contract? Explain shortly the role of margins.
Expert Answer:
Answer rating: 100% (QA)
Long position in 2 futures contract Each contract has 15000 units Initial margin 6000 Maintenance ... View the full answer
Related Book For
Posted Date:
Students also viewed these finance questions
-
(1) Show the DMA steps of sending emoticons (2KB) in KakaoTalk and the process state in each step. Describe the steps in detail. Assume that network device is accessed via memory-mapped I/O, and DMA...
-
You take out a 15 year fixed rate mortgage for $500,000, and buy down the interest rate by purchasing two points. After the points, the interest rate you agree to is 3.25% per annum. You subsequently...
-
Calculate the monthly payments on a 30 year fixed rate mortgage at 5 percent for $100,000. How much interest is paid over the life of the loan?
-
Consider constant marginal abatement cost for two firms: (a) Determine the optimal allocation for both firms when the damage function is convex, and when it is linear. (b) Is it possible to achieve...
-
(a) Which geometry and central atom hybridization would you expect in the series BH4-, CH4, NH4+? (b) What would you expect for the magnitude and direction of the bond dipoles in this series? (c)...
-
Beyond checklists and systemic analysis, what actions can MNEs take to reduce risks related to terrorism? What roles can HRM take in these processes?
-
Piecewise Linear Regression. In Example 7.3 we showed how a linear regression model with a change in slope at some point $t\left(x_{\min } Example 7.3 An important special case of practical interest...
-
Rapid Scooters plans to sell a motorized standard scooter for $ 60 and a motorized chrome scooter for $ 75. Rapid Scooters purchases the standard scooter for $ 45 and the chrome scooter for $ 55....
-
Cost of common stock equity Ross Textiles wishes to measure its cost of common stock equity. The firm's stock is curently seling for $4053. The firm just recently paid a dividend of 54.01. The fient...
-
In the figure above, if Mac and Izzie each initially start at point a and then both completely specialize and trade with each other what are the gains from trade? 24 computers and 24 TV sets per...
-
Overview Business owners consider economic and social factors when choosing initiatives for their entities. Entities want to save tax dollars and reduce their tax liability while also considering the...
-
1. Why does Naylor believe the written word to be inferior to the spoken word? 2. Naylor says that although the word "nigger" had been used many times in her presence, she did not really "hear" it...
-
A health informatics student has been asked by a faculty member to help with her research project. She explained the project in an email: "I'm really interested in using Twitter to predict public...
-
Should preferred stock be recognized as a liability, or should it be considered equity? Under International Financial Reporting Standards, preferred stock ( preference shares ) often is reported as...
-
Raner, Harris and Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices one in Chicago and one in Minneapolis. The firm classifies...
-
Novak Foundries is replacing the pipes in its cupola operations. The pipes will be a quality improvement over the old system of piping.The old pipe system cost $ 1 6 4 1 0 0 0 and has accumulated...
-
On December 31, 2022, Figg Company reported net sales revenue of $155,000, gain on the sale of equipment of $2,000, rent revenue of $4,000, and rent expense of $5,000. What would be reported as other...
-
Provide examples of a situations in which environmental disruptions affected consumer attitudes and buying behaviors.
-
The accompanying data are the percentage of babies born prematurely in 2008 for the 50 U. S. states and the District of Columbia ( DC) ( USAToday. com). a. The smallest value in the data set is 9.5...
-
The accompanying data are a subset of data read from a graph in the paper "Ladies First? A Field Study of Discrimination in Coffee Shops" (Applied Economics [April, 2008]). The data are the waiting...
-
The accompanying data are consistent with summary statistics that appeared in the paper Shape of Glass and Amount of Alcohol Poured: Comparative Study of Effect of Practice and Concentration (...
-
Assume the same facts as in Problem 42. Further assume that next year, Gary sells the SUV for $20,000. a. How much depreciation expense can Gary deduct as a business deduction with respect to the SUV...
-
Describe how liabilities are reported and analyzed.
-
Assume the same facts as in Problem 29, except that Sally has AGI of \($75,000.\) What is her qualified student loan interest deduction in 2019? Problem 29, In 2019, Sally Morris, a single taxpayer,...
Study smarter with the SolutionInn App