When opening a new position on futures contract, a broker requires initial margin of 15% (of...
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When opening a new position on futures contract, a broker requires initial margin of 15% (of the initial contract size). The broker requires an investor to replenish his margin account when the balance falls below the maintenance margin of 10% (of initial contract size). What is the margin account balance of short trader at t=3? Futures prices each day are given below. They opened 10 contracts, and contract size is 100 bushels. t-0 (initial trade) t-1 t-2 t-3 Futures Price (per bushel) $0.4 $0.45 $0.35 $0.36 Long Position Margin Short Position Margin When opening a new position on futures contract, a broker requires initial margin of 15% (of the initial contract size). The broker requires an investor to replenish his margin account when the balance falls below the maintenance margin of 10% (of initial contract size). What is the margin account balance of short trader at t=3? Futures prices each day are given below. They opened 10 contracts, and contract size is 100 bushels. t-0 (initial trade) t-1 t-2 t-3 Futures Price (per bushel) $0.4 $0.45 $0.35 $0.36 Long Position Margin Short Position Margin
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Initial contract size is 10 contracts 100 bushelscontract 1000 bushel... View the full answer
Related Book For
Introduction To Corporate Finance
ISBN: 9781118300763
3rd Edition
Authors: Laurence Booth, Sean Cleary
Posted Date:
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