What price change would lead to margin call

Assignment Help Financial Management
Reference no: EM132042844

A company enters into a short future contract to sell 5,000 bushels of wheat for 450 cents per bushel. The initial margin is $3,000 and the maintenance margin is $2,000. What price change would lead to a margin call? Under what circumstances could $1,500 be withdrawn from the margin account? Please show work.

Reference no: EM132042844

Questions Cloud

Why did tolkien choose bilbo a hobbit as a hero : Why did Tolkien choose Bilbo- a hobbit as a hero? What is the purpose, the greater implication?
Prepare payoff table and payoff graph for investor : Prepare a payoff table and a payoff graph for an investor who buys a call option on Dunkin Corp. stock.
Working on a series of biographical collages : Anna is an artist. Two years ago she began working on a series of biographical collages. Each picture reflects the life of a person or group of people.
What is the npv of accepting the lockbox agreement : Your firm has an average receipt size of $130. A bank has approached you concerning a lockbox service that will decrease your total collection time by two days.
What price change would lead to margin call : The initial margin is $3,000 and the maintenance margin is $2,000. What price change would lead to a margin call?
Prepare payoff table and payoff graph : Prepare a payoff table and a payoff graph for an investor who buys a put option on Dunkin Inc. stock. It is given that the strike price (X) of the put option is
Kinds of stereotypes does the african communities face : What are the kinds of stereotypes does the African communities face?
What financial engineering strategy : Given this scenario, what financial engineering strategy would be most beneficial to Coolmist?
What is your forecasted retained earnings : In forecasting next year's retained earnings you had a last year balance of $5,801. What is your forecasted Retained Earnings

Reviews

Write a Review

Financial Management Questions & Answers

  What was average real risk-free rate over this time period

What was the average real risk-free rate over this time period? What was the average real risk premium?

  Should the old riveting machine be replaced by the new one

The old machine has been fully depreciated and has no salvage value. Should the old riveting machine be replaced by the new one?

  Coupon bond paying semiannually

What is the 95% VaRfor the following portfolio given that you know Mu(dr) = 0 and sigma(dr) = 0.3876%?  1 unit of 4.75-year, 6.9% coupon bond paying semiannually.  Note, for the dollar amount invested in each part of this portfolio, use the price of ..

  Determine the magnitude of year 0 investment

Reclamation costs on a project are expected to be incurred over a 30 year period from 27 to 56 years in the future from now. Reclamation costs are estimated to escalate 5.0% per year in the future

  Bergman is aware that there are some qualitative factors

Jules Bergman is aware that there are some qualitative factors that are relevant to the surgery center decision. What qualitative factors might support project acceptance? What qualitative factors might preclude project acceptance?

  What is the investment future value

A four-year investment requires annual deposits of $300 at the beginning of each year. The deposits earn 8% per year. What is the investment’s future value?

  Nominal yield to maturity on this investment

Assume that you are considering the purchase of a 15-year bond with an annual coupon rate of 9.5%. The bond has face value of $1,000 and makes semi-annual interest payments. If you require an 11.0% nominal yield to maturity on this investment, what i..

  Focus exclusively on project market risk

Discuss whether or not managers of investor-owned providers focus exclusively on a project’s market risk.

  What value would mm now estimate for firm

What value would MM now estimate for each firm? What is rs for Firm L? What is the WACC for Firm U?

  Investors expect microtech to begin paying dividends

Microtech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends. However, investors expect Microtech to begin paying dividends, beginning with a dividend of $1.75 coming 3 years from toda..

  Make the smartest decisions when it comes to money

Richard doesn't always make the smartest decisions when it comes to money. He has more taxes withheld from his paycheck so he will get a large check in April from the IRS. Well, this check came in the mail yesterday. $1200.00 and he deposited it into..

  When limitations are met on funds and investments

George is unsure on how to account for these funds received, when limitations are met on funds, investments, and investment income.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd