Sarah Jones figured that gold prices are about to fall from todays price. On March 1, she
Fantastic news! We've Found the answer you've been seeking!
Question:
Sarah Jones figured that gold prices are about to fall from today’s price. On March 1, she shorted 10 futures contracts on December gold for F1 = 1,900. Each contract is for 100 ounces.
Nervously, she watched the gold price rising. Sarah decided to close out her position on April 30thFutures contract for December gold was trading at F2 = 1940.
When Sarah shorted the gold futures, margin requirement was $9.500 per contract and maintenance margin was $5,700 per contract.
At what price of gold, would she receive a margin call?
Related Book For
Fundamentals of Investments, Valuation and Management
ISBN: 978-1259720697
8th edition
Authors: Bradford Jordan, Thomas Miller, Steve Dolvin
Posted Date: