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Rate of return in the account considering the initial

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Suppose you enter into a short position in 6-month futures contract on 100 ounces of gold at a futures price of $1,100 per ounce. The initial required margin is $5,000. Two months after establishing the position, you notice that the futures price at the end of the trading day is now $1,122 per ounce.

a. When the futures price is $1,122 per ounce at the end of the trading day, what will be the new dollar balance in your account?

b. When the futures price is $1,122 per ounce at the end of the day, what will be the rate of return in the account considering the initial deposit of $5,000 that you made? (Note: You are asked for a rate of return, not a dollar amount.)

Reference no: EM131891204

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