On Monday morning you sell one June T-bond futures contract at 97:27, that is, f
ID: 2759262 • Letter: O
Question
On Monday morning you sell one June T-bond futures contract at 97:27, that is, for $97,843.75. The contract's face value is $100,000. The initial margin requirement is $2,700, and the maintenance margin requirement is $2,000 per contract. Use the following price data to answer the following questions.
Please show all steps, thank you!
Day Settle
Monday $97,406.25
Tuesday $98,000.00
Wednesday $100,000.00
After Monday's close the balance on your margin account will be ________.
a.) $2,000
b.) $3,137.50
c.) 2,700
d.) 2,262.50
Explanation / Answer
The correct answer is option b: $3,137.50
The calculation is as follows:
Initial Margin + (Selling price of futures contract - settling price on monday)
$2,700 + ($97,843.72 - $97,406.25) = $3,137.50
Hence, the closing balance on margin account will be $3,137.50
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