Given a 5,000 Bushel Futures Contract on Grain at a Price

question 53

Short Answer

Given a 5,000 bushel futures contract on grain at a price of $3.25 per bushel, a margin requirement of 5%, and a maintenance margin of 80%, your customer wants to know (for a single contract) how much would the price per bushel have to fall before additional margin would be required?

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Definitions:

Urbanized Industrial

Characterized by the growth of cities and the development of manufacturing and services, leading to a shift from agricultural-based economies.

Extractive Economy

An economic model that focuses on the extraction of natural resources for export, often associated with colonial and developing nations.

McCarran Act

also known as the Internal Security Act of 1950, is a United States federal law that required Communist organizations to register with the U.S. Attorney General and established the Subversive Activities Control Board.

1952

The year 1952, significant for various historical events including the U.S. presidential election where Dwight D. Eisenhower was elected President.