Abrader sells five futures contracts on gold. The current futures price is $1600 per ounce. Each contract
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Question:
Abrader sells five futures contracts on gold. The current futures price is $1600 per ounce. Each contract is for the delivery of 100 ounces. The initial margin is $10,000 per contract and the maintenance margin is $7,000 per contract. What price change would lead to a margin call? Under what circumstances could $2,500 be withdrawn from the margin account?
Hint: You can withdraw funds from the margin account if the total balance is higher than the initial margin, given that the balance remains at or above the initial margin.
Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
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