Question: Solve the three questions below showing all work describing them in one paragraph for each question. 1 A company enters into a short futures contract
Solve the three questions below showing all work describing them in one paragraph for each question. 1 A company enters into a short futures contract to sell 4,000 bushels of wheat for 150 cents per bushel. The initial margin is $3,000 and the maintenance margin is $2,000. What price change would lead to a margin call? Under what circumstances could $1,500 be withdrawn from the margin account? 2 A trader buys 100 shares of a stock on margin. The price of the stock is $30. The initial margin is 60% and the maintenance margin is 40%. How much money does the trader have to provide initially? For what share price is there a margin call? 3 Suppose that the principal assigned to the senior, mezzanine, and equity tranches for the ABSs and ABS CDO in Figure 6.4 is 60%, 30%, and 10% instead of 75%, 20% and 5%. How are the results in Table 6.1 affected solve three questions below showing all work describing them in one paragraph eac for each
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