Reference no: EM132998024
On 1/30 at the end of the day, Joan sold (took a short position in) 1 futures contract (one contract is agreement to buy or sell Euros 45,500) at a rate of USD 1.35 per Euro, contract expires on 6/18. Initial margin=$1,330 and maintenance margin is $1,005. On 1/31 and 2/1, the futures rate expiring on 6/18 is USD 1.365, and USD 1.370 respectively.
Problem 1: What was Joan's margin account balance at the end of 2/1(Assuming that Joan will not withdraw money from her margin account)?
A. On 2/1, Joan received another margin call to deposit $910.0 to bring up her margin balance on 2/1 back to $1,330.
B. On 2/1, Joan's margin balance was brought up to $2,240.0 due to the profit of $227.5 realized from the change in the futures rate.
C. On 2/1, Joan's margin balance was $420.0 due to the loss of $227.50 realized from the change in the futures rate.
D. On 2/1, Joan did not receive any margin call to require additional deposit, and her margin balance on 2/1 was $1,102.5
E. On 2/1, Joan received another margin call to deposit $227.5 to bring up her margin balance on 2/1 back to $1005.