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Suppose an investor contacts his broker to SELL 3 October 2013 Live Cattle Futures set on pod that the current futures price is US$1.25 per pound. The futures contracts are entered into on August 30, 2013 US21 4, 2013 at US$1.015 per pound. The initial margin is 25% of the contract size and maintenance margin o tempo daily settlement prices. Date Day Trade price Settlement price 30-Aug-13 Entered into 11.25 30-Aug-13 1 1.2 31-Aug-13 2 1.26 1.29 3 1-Sep-13 1.27 14 2-Sep-13 11.151 3-Sep-13 1.015 Closed out 4-Sep-13 1. Construct the Mark-to-market or margin account balance for trade W 50 points s broker to SELL 3 October 2013 Live Cattle Futures (size of one live cattle futures is 40,00 pounds) contracts. Suppose turther US$1.25 per pound. The futures contracts are entered into on August 30, 2013 at US$1 25 per pound and closed out on September The initial margin is 25% of the contract size and maintenance margin is 90% of the initial margin. Following table explains the Trade price Settlement price 11.25 112 11.26 11.29 3-Sep-13 15 1.27 4-Sep-13 Closed out 1.151 1.015 1. Construct the Mark-to-market or margin account balance for trader. 2. According to table what will be total gain or loss on September 4, 2013? 3. According to table when will there be a margin call? 4. What is the due time for the investor to respond to broker's cal, if any? 5. What happens if investor does not respond to the margin cal? For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BI Paragraph Arial 1d % Q MacBook Pro

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