How does a price decline affect a short position?

2. What's the term for the minimum margin that's required in a futures account at all times?

3. The spot price of silver is $18.55 an ounce. The 6-month futures price of silver is $18.71 an ounce. How would this market be described?

4. Superior Silver Mining has an inventory of 800,000 ounces of silver. The futures contracts on silver are based on 5,000 ounces. If the company wants to fully hedge its inventory, what position should it take in silver future contracts?

5. If you purchase 5 DJIA index futures at a price of $18,989, with the contract size being 10 times the level of the index, what would your profit or loss be if the futures matured at a price of $19,210?

Answer rating: 100% (QA)

1 A price decline would benefit a short position When an investor takes a short position they are ... View the full answer