A trader buys two July futures contracts on frozen orange juice. Each contract i
ID: 1102274 • Letter: A
Question
A trader buys two July futures contracts on frozen orange juice. Each contract is for the delivery of 15,000 pounds. The current futures price is 160 cents per pound, the initial margin is $6,000 per contract, and the maintenance margin is $4,500 per contract. What price change would lead to a margin call? Under what circumstances could $2,000 be withdrawn from the margin account? 1. 2. Explain how low levels of living can turn into a vicious cycle in developing countries. Explain why purchasing power parity measures of income levels tend to show a smaller difference between poor and rich countries 3. If countries are first ranked by level of real GDP per capita, and then by the value of the Human Development Index, would you expect the ranking of countries to be similar or different? Explain. 4.
Explanation / Answer
ans 4=
Particular acts that have a negative effect on the population’s well-being could end up being documented as positive additions to the Gross Domestic Product. For example, crimal activities. Increasing criminal acts can raise a nation’s GDP via greater expenses for upholding law & order situation(by recruiting additional police officers). Another instance is the impact of having dwindling forests due to logging operations. Gross Domestic Product is raised when trees are cut for wood & other utilizations. The negative effect of deforestation isn’t taken into account. GDP is also condemned as it doesn’t take into account other aspects that describe population's well-being such as life expectancy & literacy attainment.
It is for these causes that other ways of analysing standard of living have been developed. One of these is the HDI.
We can say from the above explanation that rankings of nations on basis of GDP and HDI can be different.
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