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

Participants in hedge funds-management company, The Manager or Management C...

The Manager or Management Company The firm sponsoring the Fund could often structure it as a management company. Its primary responsibility is to determine investment strategie

Explain restatement of investment appraisal, Restatement of investment appr...

Restatement of investment appraisal In the following solution the tax allowances in relation to the initial outlay on equipment are evaluated separately. Other approaches are a

Sally Thomson, Ask questionSally Thomson #Minimum 100 words accepted#

Ask questionSally Thomson #Minimum 100 words accepted#

Calculate the price of a put option contract, The price of a non-dividend p...

The price of a non-dividend paying share, St, follows a geometric Brownian motion process. The current price of the share is £10 and volatility of the share price process is 12% pe

Emerging market bonds, Emerging market bonds are the bonds offe...

Emerging market bonds are the bonds offered by less developed countries. The government normally issues them. These exclude borrowings from gove

Functions of treasurer, Functions of Treasurer:- (1) Cash Management: -...

Functions of Treasurer:- (1) Cash Management: - It comprises the managing of cash receipts and cash payments of the business. (2) Banking Relations: - It comprises operating

What financial managers look for when they analyze pro forma, What do finan...

What do financial managers look for when they analyze pro forma financial statements? Later than the pro forma financial statements are complete, financial managers analyze the f

Net income, What remains of an organization revenue after all expenses and ...

What remains of an organization revenue after all expenses and taxes have been paid.

Operating cycle, applicability of an operating cycle in a vegetable growing...

applicability of an operating cycle in a vegetable growing business

Calculate npv-irr - mirr - payback and discounted payback, Calculate NPV-IR...

Calculate NPV-IRR - MIRR - payback and discounted payback: 1-      Define and explain as well as you can of the following: a-      Goals and objectives of the Corporate Fir

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