The futures price of gold is $1,750. Futures contracts are for 100 ounces of gol
ID: 2626516 • Letter: T
Question
The futures price of gold is $1,750. Futures contracts are for 100 ounces of gold, and the margin requirement is $5,000 a contract. The maintenance margin requirement is $1,500. You expect the price of gold to rise and enter into a contract to buy gold.
a. How much must you initially remit?
b. If the futures price of gold rises to $1,755, what is the profit and percentage return on your investment?
c. If the futures price of gold declines to $1,748 what is the loss and percentage return on the position?
d. If the futures price falls to $1,738, what must you do?
e. If the futures price continues to decline to $1,710, how much do you have in your account?
f. How do you close your position?
I have to see your detailed work to learn from it please.
Explanation / Answer
a) remits the margin requirement: $5,000
b) If the price of gold rises to $1755,
The contract is worth: $1755 x 100 = $175500.
The profit is $175500
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.