# Exercise 11 Answers - -3000 \$500 \$1255 Yes Replenish to...

This preview shows pages 1–2. Sign up to view the full content.

ECON 423- Exercise 11 a. Let us say that you buy one futures contract for a 10 year T-note at a price of 129’16. What is the price of the futures contract? What will be the Face value of your contract? F = \$100,000; P = \$129,500 b. The initial margin for this futures contract is \$1755 and the maintenance margin is \$1500. Fill the following table. Let us say that you have \$2000 in your account. Let us say that the dollar price is as follows: Day Price Margin -debited or credited? Margin balance Margin Call Yes/No Comment 0 \$129.50 0 \$2000 No Purchase day 1 \$129.00 -\$500 \$1500 No 2 \$130.00 +\$1000 \$2500 No 3 \$131.00 +\$2000 \$3500 No 4 \$128.00

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: -3000 \$500+\$1255 Yes Replenish to initial margin c. Now consider the seller’s margin account. Let us say that the seller also has \$2000 in his/her account. What will happen to the seller’s margin account when the prices change as above? Month Charts Last Change Prior Settle Open High Low Volume Dec 2011 129'160 +0'020 129'140 129'155 129'165 129'13 9,595 Day Price Margin -debited or credited? Margin balance Margin Call Yes/No Comment \$129.50 NA \$2000 NA 1 \$129.00 +\$500 \$2500 No 2 \$130.00-\$1000 \$1500 No 3 \$131.00-\$1000 \$500+1255 Yes 4 \$128.00 +\$3000 \$4755...
View Full Document

## This note was uploaded on 02/13/2012 for the course ECON 423 taught by Professor Vd during the Spring '08 term at UNC.

### Page1 / 2

Exercise 11 Answers - -3000 \$500 \$1255 Yes Replenish to...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online