An investor holds a short position in four July crude palm oil futures contracts. When the contract was entered into on day zero, the futures price was RM 2200 per metric tonne. The initial margin is RM 2750 per contract, and the maintenance margin is RM 1500 per contract. The following table gives information on the price of CPO for July delivery over a 3-day period. Closing futures Price (RM) 2150 2300 2350 Day 1 3 Assess what will the variation margin be on the first day a margin call is received? A. RM 11,000 B. RM 10,000 C. RM 5,000

An investor holds a short position in four July crude palm oil futures contracts. When the contract was entered into on day zero, the futures price was RM 2200 per metric tonne. The initial margin is RM 2750 per contract, and the maintenance margin is RM 1500 per contract. The following table gives information on the price of CPO for July delivery over a 3-day period. Closing futures Price (RM) 2150 2300 2350 Day 1 3 Assess what will the variation margin be on the first day a margin call is received? A. RM 11,000 B. RM 10,000 C. RM 5,000

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

1. Assume a futures price of Php5000 at the start of the transaction, with Php250 initial margin requirement and a Ph150 maintenance margin requirement. The trader takes in a long position of 10 contracts. Marking-to-market process occurs over the period of seven trading days. A. Complete the table above for the holder of the long position. B. When could there be a margin call? C. How much are the total gains or losses by the end of day 7? Futures Beginning Balance Ending Balance Funds Settlement Day Price Gain/Loss Deposited Price Change 5000 4960 2 4800 5050 4 5175 5200 5250.50 5310.75 7 D. Complete the table above for the holder of the short position. Futures Beginning Balance Funds Day Settlement Price Ending Balance Price Gain/Loss Deposited Change 5000 1 4960 4800 5050 4 5175 5200 5250.50 7 5310.75 E. How much are the total gains or losses by the end of day 7?
1. Assume a futures price of Php5000 at the start of the transaction, with Php250 initial margin requirement and a Ph150 maintenance margin requirement. The trader takes in a long position of 10 contracts. Marking- to-market process occurs over the period of seven trading days. A. Complete the table above for the holder of the long position. B. When could there be a margin call? C. How much are the total gains or losses by the end of day 7? Futures Beginning Funds Settlement Ending Day Price Gain/Loss Balance Deposited Price Balance Change 5000 1 4960 2 4800 3 5050 4 5175 5 5200 6 5250.50 7 5310.75 D. Complete the table above for the holder of the short position. Futures Beginning Funds Settlement Ending Day Price Gain/Loss Balance Deposited Price Balance Change 5000 1 4960 2 4800 3 5050 4 5175 5 5200 6 5250.50 7 5310.75 Е. How much are the total gains or losses by the end of day 7?
1. Assume a futures price of Php5000 at the start of the transaction, with Php250 initial margin requirement and a Ph150 maintenance margin requirement. The trader takes in a long position of 10 contracts. Marking-to-market process occurs over the period of seven trading days. A. Complete the table above for the holder of the long position. B. When could there be a margin call? C. How much are the total gains or losses by the end of day 7? Futures Beginning Balance Funds Settlement Ending Balance Day Price Gain/Loss Deposited Price Change 5000 1 4960 2 4800 5050 4 5175 5 5200 6. 5250.50 7 5310.75 D. Complete the table above for the holder of the short position. Futures Beginning Balance Funds Settlement Ending Balance Day Price Gain/Loss Deposited Price Change 5000 4960 1 2 4800 3 5050 4 5175 5200 5250.50 7 5310.75 E. How much are the total gains or losses by the end of day 7?
Prices of a futures contract for 5 consecutive trading-days are provided in the table below. The initial margin requirement is set at $6.00 per contract and the maintenance margin is $3.60 per contract. Futures Price Day 0 $120 1 $118 2 $117 3 $119 4 $123 $125 5 On day 0, a trader enters into a short position for 15 contracts. The ending balance for the margin account on day 5 is closest to: O a. $15. O b. $210. O C. None of the above. O d. $60.
Please answer the next question based on the closing July futures contract prices for EUR for three consecutive days in March 20XX. You sold two EUR futures contract at the closing price on 3/01. Each EUR futures contract requires the delivery of EUR 150,000. Suppose, the initial and maintenance margin for each EUR futures contract are $2,000 and $1,500, respectively. Date July EUR Futures Contract Price On 3/02 you will O get get O not get; not get O get; not get O not get: get 3/01 3/02 3/03 $1.3328 $1.3345 $1.3398 a margin call and on 3/03 you will a margin call from the exchange
1. Assume an investor takes a long position in 4 September KLSE CI futures contract on 15th July. The futures contract price is RM1623.00. The initial margin and maintenance margin are RM6,500 per contract and RM4,500.00 per contract respectively. The trader closes his position on the sixth day. The contract size is RM50 per contract. The futures settlement prices during those six days are: Day 1 RM1621 Day 2 RM1625 Day 3 RM1630 Day 4 RM1620 Day 5 RM1618 Day 6 RM1640 a. Determine the trader's total gains or losses. b. How much does the trader pay for margin call ? * Show all workings
= An investor enters a short position in the S&P 500 E-mini futures contract that will expire in three months. The S&P 500 index currently trades at St $4,538.43. (As of 3-Dec-21.) Regarding contract specifications, the contract corresponds to 50 times the S&P 500 index. Additionally, the initial and maintenance margins are, respectively, $12,100 and $11,000. Finally, the futures contract is currently trading at Fț(T) = $4,531.25 (actual settlement price for the Mar-22 contract on 3-Dec-21). Given this information, address the following two questions. 12. Suppose that the annual dividend yield is q = 2%, what is the implied annual risk-free rate r? (a) -0.012 (b) 0.012 (c) 0.014 (d) -0.0370 12
On Monday morning you sell one June T-bond futures contract at $97,843.75. The contract's face value is $100,000. The initial margin requirement is $2,700, and the maintenance margin requirement is $2,000 per contract. Use the following price data to answer the following questions. DaySettleMonday$ 97,406.25Tuesday$ 98,000.00Wednesday$ 100,000.00 The cumulative rate of return on your investment after Wednesday is a __________. Multiple Choice 79.86% loss 2.63% loss 33.00% gain 53.95% loss
Assume today’s settlement price on a CME EUR futures contract is $1.3130/EUR. You have a short position in one contract. Your performance bond account currently has a balance of $1,700. The next day’ settlement price is $1.3059. Calculate the balance of the account at the end of the day. (USD, no cents)
Suppose an investor takes a long position in 1 Gold futures contract, and the following information is given: Contract size = 100 ounces. Futures price = $500 Initial margin = $3,000 per contract. Maintenance margin = $2,000 per contract Date Jan. 1 Jan. 2 Jan. 3 Jan. 4 Jan. 5 Jan. 6 Jan. 7 Jan. 8 Future prices 494 495 488 490 491 474 475 474 i) In which days will there be a margin call? How much will be the variation margin in all cases? ii) In which days do the balances in the margin account exceed the initial margin? B) Party A agrees to pay Party B a fixed rate of 4%. Party B agrees to pay Party A a floating rate based on the return of the S&P 500 Index. The payments will be made annually and will be based on a notional principal of $1,000,000. i) Suppose at the end of the first year, the S&P 500 appreciated by 4.5%. How much will Party B will pay Party A II) What will happen in the second year, if the S&P 500 depreciated…
On January 1, you sold one February maturity S&P 500 Index futures contract at a futures price of 2,412. If the futures price is 2,480 at contract maturity, what is your profit? The contract multiplier is $50. (Input the amount as positive value.)
A company enters into a short futures contract to sell 10,000 units of a commodity for $0.5 per unit. The initial margin is $5000 and the maintenance margin is $3000. When will there be a margin call? Question 1Answer a. As soon as the futures price exceeds $0.7 per unit. b. As soon as the futures price exceeds $0.8 per unit. c. As soon as the futures price exceeds $0.5 per unit. d. As soon as the futures price exceeds $0.6 per unit.

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS