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

Factors affecting choice of a minimum cash balance amount, Explain the fact...

Explain the factors affecting the choice of a minimum cash balance amount. The smallest cash balance amount is determined by how easy it is to raise funds when needed, how expe

Why is capital budgeting analysis so important to the firm, Why is capital ...

Why is capital budgeting analysis so important to the firm? The major goal of the financial manager is to maximize shareholder wealth. Capital investments along with positive N

Analyze the practice of democracy, Question 1: Analyze the practice of ...

Question 1: Analyze the practice of democracy as advocated by the early Greek political thinkers. Question 2: To what extent can Man live peacefully with each other wi

Give new marketing strategy, a) B2C businesses provide goods and services t...

a) B2C businesses provide goods and services to the general public, i.e. consumers. HMV sell music, books and DVDs (via Waterstones) to private individuals and can therefore be cla

Agency theory, AGENCY THEORY An agency relationship may be defined as a...

AGENCY THEORY An agency relationship may be defined as a contract under which one or more people (the principals) hire another person (the agent) to perform some services on th

What is redeemable debt, What is Redeemable debt Company will have to...

What is Redeemable debt Company will have to re-pay the debt at redemption date or between the two redemption dates (i.e. 20X5/20X9, means debt can be redeemed any time betwe

Effect on stock valuation, Effect on Stock Valuation Until the 1960s, c...

Effect on Stock Valuation Until the 1960s, common stocks were viewed as a good instrument against loss caused by inflation. Also, before 1960, stocks were not providing full he

Valuation, Valuation The process of finding out the current value of an...

Valuation The process of finding out the current value of an asset or company is known as valuation. There are various techniques that can be utilized to find value, few are su

Accounting system, Accounting System: The accounting systems are the pr...

Accounting System: The accounting systems are the primary financial systems that any business should have in place to ensure accurate and usable financial information. The b

What are implications of ownership rights by equity claims, What are the ma...

What are the main implications of ownership rights by equity claims? Ownership rights have two primary implications: a. First, equity holders can advantage by any raise in t

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