Question 2-7 are based on the following series of futures price (F(0), F(1),... F(6)): Day 0: F(0)=$212 Day...

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Question 2-7 are based on the following seriesof futures price (F(0), F(1),... F(6)):
Day 0: F(0)=$212
Day 1: F(1)=$211
Day 2: F(2)=$214
Day 3: F(3)=$209
Day 4: F(4)=$210
Day 5: F(5)=$202
Day 6: F(6)=$200
Suppose you are going to long 20 contracts. The initialmargin=$10 per contract, and the maintenance margin is $2.
First Question from the set of information: howmuch do you need to deposit in the trading account at Day 0?
Using the same set of information from Question2, what is the ending balance in Day 1?
Using the same set of information from Question 2, figure outwhat is the first day, on which, you receive margin call and needto put extra money into the trading account?
Using the same set of information from Question 2, answeringwhat is the additional fund that needs to put into account on Day6?
Using the same set of information from Question 2, answeringwhat is the ending balance at Day 6?
Using the same set of information from Question 2, answeringwhich day has the largest gain among the 6 days?

Answer & Explanation Solved by verified expert

3.7 Ratings (622 Votes)

Initial margin 10 per contract Number of contract N 20 Maintenance margin 2 per contract Initial margin 10 x N 10 x 20 200 Maintenance margin 2 x 20 40 Please see the table below Please see the second row to understand the mathematics Day Rate Daily Gain Loss Balance Maintenance margin required Margin Call amount Closing Balance n Fn An Fn See Answer

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Question 2-7 are based on the following seriesof futures price (F(0), F(1),... F(6)):Day 0: F(0)=$212Day 1: F(1)=$211Day 2: F(2)=$214Day 3: F(3)=$209Day 4: F(4)=$210Day 5: F(5)=$202Day 6: F(6)=$200Suppose you are going to long 20 contracts. The initialmargin=$10 per contract, and the maintenance margin is $2.First Question from the set of information: howmuch do you need to deposit in the trading account at Day 0?Using the same set of information from Question2, what is the ending balance in Day 1?Using the same set of information from Question 2, figure outwhat is the first day, on which, you receive margin call and needto put extra money into the trading account?Using the same set of information from Question 2, answeringwhat is the additional fund that needs to put into account on Day6?Using the same set of information from Question 2, answeringwhat is the ending balance at Day 6?Using the same set of information from Question 2, answeringwhich day has the largest gain among the 6 days?