You Sell One December Futures Contracts When the Futures Price

question 13

Multiple Choice

You sell one December futures contracts when the futures price is $1,010 per unit.Each contract is on 100 units and the initial margin per contract that you provide is $2,000.The maintenance margin per contract is $1,500.During the next day the futures price rises to $1,012 per unit.What is the balance of your margin account at the end of the day?

• A) $1,800
• B) $3,300
• C) $2,200
• D) $3,700

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Definitions:

Arithmetic Method

A quantitative approach involving basic mathematical operations to solve problems or make calculations.

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Factors that quantify the rate of improvement or learning in an operation, typically showing how costs decrease as experience increases.

Labour-Intensive

Describes industries or processes that require a large amount of manual labor input compared to capital investment.

Learning Rate

The speed at which a person or an organization improves performance or acquires knowledge over time, often resulting in reduced costs or increased proficiency.