Question

Use the table for the​ question(s) below.

Day	1	2	3	4	5
Futures Price	109	107	106	107	104

Suppose oil futures prices are as given in the above table​ (price per​ barrel). Suppose you buy 100 crude oil futures​ contracts, each for 1000 barrels of crude​ oil, at the current futures price of​ $108 per barrel on day 0. What is your cumulative​ profit/loss in your margin account by the end of day​ 5?

A.−​$400,000

B.​$300,000

C.−​$300,000

Answer 1

Please find below the answer. please do provide rating..

	cumulative​ loss in your margin account by the end of day​ 5
			i	ii	iii	iv=i*ii*iii
			Price per barrel	Number of contract	Barrel per contract	Buy price
i	Buy price		108	100	1000	10800000
ii	5th day price		104	100	1000	10400000
iii=ii-i	Loss					(400,000)
	Correct answer is option A. -400000