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Question
the futures price of gold is $1,000. futures contracts are for 100 ounces of gold, and the margin requirement is $3,000 a contract. the maintenance market requirement is $1,500. a speculator expects the price of gold to rise and enters into a contract to buy gold.
a. how much must the speculator initially remit?
b. if the futures price of gold rises to $1,005, what is the profit and return on the position?
c. if the futures price of gold declines to $998, what is the loss on the position?
d. if the futures price declines to $984, what must the speculator do?
e. if the futures price continues to decline to $982, how much does the speculator have in the account?
Answer
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