2. Max Fields is a commodity trader who trades for his own account. Max decides to go short (sell) November heating oil on August 15, believing that the futures price for the November contract is too high. Currently, the futures price for November heating oil is going for $1.48 a gallon. Heating oil futures contracts involve 5000 gallons and have an initial margin of 6.75%, with a maintenance margin level of 3.45% (below which a maintenance call will occur). Assume Max takes a position involving 3 contracts.

a. How much must Max put down to meet his initial margin requirement? ($1498.50)

b. On August 22 heating oil futures prices for November delivery drop to $1.45 a gallon. Determine the profit or loss Max has made on his November heating oil contracts.($450 )

c. What is the current balance in Maxs margin account as of the end of trading on August 22? d. At the end of trading on September 5, the futures price for November heating oil stands at $1.55 per gallon. ($1948.50 )

1.) Determine the account balance of Maxs margin account as of the end of the day. ($448.50 )

2.) Will Max face a margin call? If so, how much must he add to his account in the form of variance margin to meet the margin call? ($1050 (variance margin needed) )

e. On September 7, the futures price for November heating oil rises to $1.57 per gallon. At this point Max decides to enter a reverse trade and close out (unwind) his position.

1.) Determine the short positions HPY for the November futures contract at the time of the reverse trade. ( 6.08%)

2.) Determine Maxs total profit/loss realized on his November heating oil position. (Remember, he has held 3 contracts.) (- $1350 )

3.) What is Maxs return on investment which he realized by taking his November futures position in heating oil? ( 52.97% )

Please answer without the use of excel. In the parenthesis are the answers, I just need the ways to solve them please.