a) You sell three December gold futures contracts when the futures price is $410 per ounce. Each contract is on 100 oun

[answerhappygod]

a) You sell three December gold futures contracts when the
futures price is $410 per ounce. Each contract is on 100 ounces of
gold and the initial margin per contract is $2,000. The maintenance
margin per contract is $1,500. During the next seven days the
futures price rises slowly to $412 per ounce. What is the balance
of your margin account at the end of the seven days?
(5 marks)
b) A company enters into a short futures contract to sell
50,000 pounds of cotton for 70 cents per pound. The initial margin
is $4,000 and the maintenance margin is $3,000. What is the futures
price above which there will be a margin call?
(5 marks)
c) A company enters into a long futures contract to buy
1,000 units of a commodity for $20 per unit. The initial margin is
$6,000 and the maintenance margin is $4,000. What futures price
will allow $2,000 to be withdrawn from the margin account? (5
marks)
d) What is marking-to-market?
(5 marks)