Consider a long position of five July wheat contract. each of which covers 5,000 bushels. Assume that thee contract price is $2.00 and that each contract requires an initial margin deposit of $150 and a maintenance margin of $100. The total initial margin required for the 5-contract trade is $750. The maintenance margin for the account is $500. Compute the margin balance for this position after a 2 cent decrease in price on Day 1, a l-cent increase in price on Day 2, and a l-cent decrease in price on Day 3.
Consider a long position of five July wheat contract. each of which covers 5,000 bushels. Assume that thee contract price is $2.00 and that each contract requires an initial margin deposit of $150 and a maintenance margin of $100. The total initial margin required for the 5-contract trade is $750. The maintenance margin for the account is $500. Compute the margin balance for this position after a 2 cent decrease in price on Day 1, a l-cent increase in price on Day 2, and a l-cent decrease in price on Day 3.
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter13: best-practice Tactics: Game Theory
Section: Chapter Questions
Problem 14E
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- Consider a long position of five July wheat contract. each of which covers 5,000 bushels. Assume that thee contract price is $2.00 and that each contract requires an initial margin deposit of $150 and a maintenance margin of $100. The total initial margin required for the 5-contract trade is $750. The maintenance margin for the account is $500. Compute the margin balance for this position after a 2 cent decrease in price on Day 1, a l-cent increase in price on Day 2, and a l-cent decrease in price on Day 3.
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