Futures price reduces margin in long futures position

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An initial margin requirement of 8% on the purchase of a $45,762 crude oil futures contract, will experience a decline of about _____ % in value when the futures contract value falls to $44,000. (Hint: First find out how cash must be paid to establish the position by meeting the initial margin requirement and then calculate percentage change in margin as a result of fall of futures price. Recall a one dollar fall in futures price reduces margin in a long futures position by same amount. Percentage change = (Value of final margin – Value of initial margin) / Value of initial margin.) show work a. 35% b. 44% c. 48% d. 53% e. 57% Previous Next

Reference no: EM131872289

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