Exercise 11 Answers

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

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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
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Unformatted text preview: -3000 $500+$1255 Yes Replenish to initial margin c. Now consider the sellers margin account. Let us say that the seller also has $2000 in his/her account. What will happen to the sellers 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...
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Exercise 11 Answers - -3000 $500+$1255 Yes Replenish to...

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