Because of an outbreak of mad cow disease in Britain, you think U.S. cattle futures will...

Transcribed Image Text:

Because of an outbreak of mad cow disease in Britain, you think U.S. cattle futures will rise as cattle buyers switch to U.S. suppliers. You act on your belief by purchasing 4 contracts (50,000 pounds per contract) for April delivery at $1.494. You are required to put down 10%. How much equity/capital did you need to make this transaction? The equity/capital you need to make this transaction is $ (Round to the nearest dollar.) Because of an outbreak of mad cow disease in Britain, you think U.S. cattle futures will rise as cattle buyers switch to U.S. suppliers. You act on your belief by purchasing 4 contracts (50,000 pounds per contract) for April delivery at $1.494. You are required to put down 10%. How much equity/capital did you need to make this transaction? The equity/capital you need to make this transaction is $ (Round to the nearest dollar.)

Answer rating: 100% (QA)

To calculate the equitycapital needed for this transaction we nee... View the full answer