A company enters into a long futures contract to buy 1,000 units of a commodity for...
A company enters into a long futures contract to buy 1,000 units
of a commodity for
$20 per unit. The initial margin is $6,000 and the maintenance
margin is $4,000. What
futures price will allow $2,000 to be withdrawn from the margin
account?
Homework Answers
What
futures price will allow $2,000 to be withdrawn from the margin
account?
Let price be P
Hence,
1000*(P-20)=4000
=>P=24
So, Futures price of 24
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