The futures price of corn is $2.00. The contracts are for 10,000 bushels, so a contract is
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The futures price of corn is $2.00. The contracts are for 10,000 bushels, so a contract is worth $20,000. The margin requirement is $2,000 a contract, and the maintenance margin requirement is $1,200. A speculator expects the price of the corn to fall and enters into a contract to sell corn.
a) How much must the speculator initially remit?
b) If the futures price rises to $2.13, what must the speculator do?
c) If the futures price continues to rise to $2.14, how much does the speculator have in the account?
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a The investor must remit the margin requirement 2000 b The contract is currently worth 21...View the full answer
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