Question

The futures price of corn is $3.40 a bushel. Futures contracts for corn are based on 10,000 bushels, and the margin requirement is $2,000 a contract. You expect the price of corn to fall and sell the contract short.
a. What is the value of the contract and how much must you initially remit?
b. If the futures price of corn rises to $3.51, what is the profit or loss on your position?
c. If the futures price of gold declines to $3.28, what is the profit or loss on your position?
d. If the futures price declines to $3.18, what may you do?
e. How do you close your position?


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  • CreatedMarch 19, 2015
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