Question: Ch. 14 Futures A Saved 4 Suppose the initial margin on heating oil futures is $12,500, the maintenance margin is $11,000 per contract, and you

 Ch. 14 Futures A Saved 4 Suppose the initial margin on

Ch. 14 Futures A Saved 4 Suppose the initial margin on heating oil futures is $12,500, the maintenance margin is $11,000 per contract, and you establish a long position of 15 contracts today, where each contract represents 36,000 gallons. Tomorrow, the contract settles down $.07 from the previous day's price. What is the maximum price decline on the contract that you can sustain without getting a margin call? (A negative value should be Indicated by a minus sign. Do not round Intermediate calculations. Round your answer to 3 decimal places.) 10 points Margin call 7.000 cents per gallon e5004 Print References Ch. 14 Futures A Saved 4 Suppose the initial margin on heating oil futures is $12,500, the maintenance margin is $11,000 per contract, and you establish a long position of 15 contracts today, where each contract represents 36,000 gallons. Tomorrow, the contract settles down $.07 from the previous day's price. What is the maximum price decline on the contract that you can sustain without getting a margin call? (A negative value should be Indicated by a minus sign. Do not round Intermediate calculations. Round your answer to 3 decimal places.) 10 points Margin call 7.000 cents per gallon e5004 Print References

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!