Suppose that you SHORT FIVE May 2016 Gold futures contracts at the opening price of $1,119.40/oz...

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Finance

Suppose that you SHORT FIVE May 2016 Goldfutures contracts at the opening price of $1,119.40/oz on May 4,2019. You close out your position on May 8, 2019 at a price of$1,110.50/oz. The initial margin and the maintenance marginrequirements are $4,400 per contract and $4,000 per contract,respectively. Contract size is 100 troy ounces per contract. Assumethat you deposit the initial margin in cash for the FIVEcontracts sold and did not withdraw the excess on anygiven day. (15 pts)
Complete the table below given the following daily settlementprices. (9 points)
Day
Settlement
Price ($/oz)
Beginning
Balance
Total Daily
Profit / Loss
Margin Call
Deposits
Ending
Balance
May 4, 2019
$1,120.20
May 5, 2019
$1,118.80
May 6, 2019
$1,135.00
May 7, 2019
$1,130.00
May 8, 2019
What is your total profit (loss) on the contracts yousold?
What is your percentage return based on the amount put up asmargin?
If, on May 8, 2016, you chose to deliver the gold, what wouldyou receive and what would you be delivering? State clearly thetransactions and the dollar amount involved.

Answer & Explanation Solved by verified expert

3.6 Ratings (535 Votes)

a Total profit on the contracts sold is 488227b Percentage returnTotal profit is 488227Amount put See Answer

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Transcribed Image Text

Suppose that you SHORT FIVE May 2016 Goldfutures contracts at the opening price of $1,119.40/oz on May 4,2019. You close out your position on May 8, 2019 at a price of$1,110.50/oz. The initial margin and the maintenance marginrequirements are $4,400 per contract and $4,000 per contract,respectively. Contract size is 100 troy ounces per contract. Assumethat you deposit the initial margin in cash for the FIVEcontracts sold and did not withdraw the excess on anygiven day. (15 pts)Complete the table below given the following daily settlementprices. (9 points)DaySettlementPrice ($/oz)BeginningBalanceTotal DailyProfit / LossMargin CallDepositsEndingBalanceMay 4, 2019$1,120.20May 5, 2019$1,118.80May 6, 2019$1,135.00May 7, 2019$1,130.00May 8, 2019What is your total profit (loss) on the contracts yousold?What is your percentage return based on the amount put up asmargin?If, on May 8, 2016, you chose to deliver the gold, what wouldyou receive and what would you be delivering? State clearly thetransactions and the dollar amount involved.

Day	Settlement Price ($/oz)	Beginning Balance	Total Daily Profit / Loss	Margin Call Deposits	Ending Balance
May 4, 2019	$1,120.20
May 5, 2019	$1,118.80
May 6, 2019	$1,135.00
May 7, 2019	$1,130.00
May 8, 2019