Reference no: EM133124294
Question - On January 31, a company takes a long position in July futures on 1,764,000 gal of gasoline at $1.3552/gal. The size of one contract is 42,000 gal. The initial margin is $6,237 per contract and the maintenance margin is $5,670 per contract.
Required -
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 July gasoline futures on January 31, for the exchange to withdraw $48,510.00 from the margin account in the process of daily settlement?
d. What should be the closing price of July gasoline futures on January 31, for the exchange to deposit $18,522.00 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 July gasoline futures on January 31 is $1.3398/gal?
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