Calculate the changes in the margin account, Financial Management

Assignment Help:

Suppose today's settlement price on a CME DM futures contract is $0.6080/DM. You comprise a short position in one contract. Your margin account at present has a balance of $1,700.  The next settlement prices of three days are $0.6066, $0.6073, and $0.5989. Calculate the changes in the margin account from every day marking-to-market and the balance of the margin account after that the third day.

Solution:  $1,700 + [($0.6080 - $0.6066) + ($0.6066 - $0.6073) +  ($0.6073 - $0.5989)] x DM125,000 = $2,837.50, in which DM125,000 is the contractual size of one DM contract.


Related Discussions:- Calculate the changes in the margin account

What do you mean by misappropriation of fund, Q. What do you mean by Misapp...

Q. What do you mean by Misappropriation Of Fund? Misappropriation Of Funds allotted for specific works under capital or Revenue demand but the expenditure is incurred for anoth

Nature of current liabilities, Current Liabilities: A liability is an ...

Current Liabilities: A liability is an obligation to convey assets or do services at some future date. For purposes of balance sheet analysis, it is important to create a dist

Conversion privilege, In convertible bonds, bondholders get a right t...

In convertible bonds, bondholders get a right to convert their bonds for a specific number of shares of the bond issuer. This privilege allows bondholders to take

Sinking fund provisions, Sinking fund provisions is a pool of funds s...

Sinking fund provisions is a pool of funds set aside to repay the debt. Under this, certain amount of money is kept aside every year form profit. It is then used

Budget, Details on budgetary control process

Details on budgetary control process

Types of government stocks, Types of Government Stocks Issue of Stock t...

Types of Government Stocks Issue of Stock through AuctionThe RBI, on behalf of the government, issues notification to auction government securities, stating the amount and time

Treasury notes or t-notes, Treasury Notes or T-notes are the securiti...

Treasury Notes or T-notes are the securities issued with maturities of more than one year and but not more than 10 years. All these securities are coupon securiti

Define accumulated depreciation, What is accumulated depreciation? Depr...

What is accumulated depreciation? Depreciation is the allocation of an initial cost over time of asset. Whereas the term accumulated depreciation is the total of all the deprec

Operating cycle , using the operating cycle and any other financial managem...

using the operating cycle and any other financial management knowledge,discuss the applicabilty of such cycle to poultry

Portfolio risk, What is the correlation between the efficient portfolio and...

What is the correlation between the efficient portfolio and the risk-free asset? Possible answers are +1, -1, 0, or cannot be calculated.

Write Your Message!

Captcha
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