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What is the smallest price change

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On January 31, a company takes a short position in May futures on 5,400 oz of gold at $1,168.60/oz. The size of one contract is 100 oz. The initial margin is $12,870 per contract and the maintenance margin is $11,700 per contract.

a. How much money should be deposited as the initial margin for the whole position?

b. What is the smallest price change that would lead to a margin call?

c. What should be the closing price of May gold futures on January 31, for the exchange to withdraw $56,430.00 from the margin account in the process of daily settlement?

d. What should be the closing price of May gold futures on January 31, for the exchange to deposit $66,096.00 to the margin account in the process of daily settlement?

e. What amount (if any) would be required to be deposited by the company to the margin account if the closing price of May gold futures on January 31 is $1,183.00/oz?

Round your answers to three decimal places.

Reference no: EM133132906

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