AutoSave OFF G Sv e w margins_example - Saved to my Mac Q Search in Document Home Insert Draw Design Layout References Mailings Review View Share Comments Ev All Times New... 12A A Aa AO BI Uvab X, X? ADA AaBbCcDdE AaBb CcDdEt AaBbCcDdEt AaBbCcDdE AaBbCcDc AaBbCcDdEt AaBb No Spacing Heading 1 Heading 2 I AaBbCcDdE: Subtle Emph... Paste Normal Subtitle Emphasis Styles Pane Office Update To keep up-to-date with security updates, fixes, and improvements, choose Check for Updates. Check for Updates Setup You are a manager of a grain elevator. You buy 10,000 bushels of corn from a local farmer. To hedge the price, you turn around and sell 2 contracts of December corn futures at $6/bushel (what turns out to be the settlement price for the day). Each contract is for 5,000 bushels, so you have purchased 10,000 bushels worth of futures. The initial margin for one contract is $2,700. The maintenance margin level for one contract is $2,000 per contract. a. How much is your initial margin total? So far, you have spent (invested) this amount in order to enter the futures market. This amount is the capital you have put into this hedge. Your equity is the amount of capital you have invested plus any gains or losses after marking to market (explained soon...) b. How much is your maintenance margin total? c. If this were a forward contract, how much would you have received for selling your corn in the future? Value of contract = price x quantity = 6 x 10,000 =. Page 1 of 3 550 words English (United States) Focus E E . ' - - + 190%