1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Agata [3.3K]
3 years ago
12

Suppose that you enter into a short futures contract to sell July silver for $17.20 per ounce. The size of the contract is 5,000

ounces. The initial margin is $4,000, and the maintenance margin is $3,000. What change in the futures price will lead to a margin call? What happens if you do not meet the margin call?
Business
1 answer:
ivanzaharov [21]3 years ago
7 0

Answer:

$0.20

Explanation:

For computing the change in future price, first we have to determine the loss which is shown below:

Loss = Initial Margin - Maintenance Margin

        = $4,000 - $3,000

        = $1,000

Now the change in future price would be

= Loss ÷ size of the contract

= $1,000 ÷ 5,000 ounces

= $0.20

The future price is increased by $0.20

And, if the margin call is not meet than the broker will stop at best price so that he cannot suffer more loss

You might be interested in
If a Starbucks tall latte cost $3.20 in the United States and 3 euros in the Euro area, then purchasing-power parity implies the
Nataliya [291]

Answer:

a. .938 If the exchange rate is less than this, it costs more dollars to buy a tall latte in the U.S. than in the Euro area.

Explanation:

We can see in the example that the Euro is cheaper than the dollar in purchasing-power parity. More specifically, the exchange rate is .938 euros per dollar.

This is why it is more expensive to buy a tall latte in the U.S. than in Europe. The Euro is cheaper.

5 0
3 years ago
Chelsea's house is for sale, and she is selling it through a real estate agent. The house is listed, and any licensed agent may
77julia77 [94]

Answer: Invitees.

Explanation:

Stan the property agent and Paula the potential buyer are invitees to Chelsea's property. An invitee is a person or group of people invited to the property of an individual for the purpose of a business transaction or a public visit.

6 0
3 years ago
At a price of $1.00, a local coffee shop is willing to supply 100 cinnamon rolls per day. At a price of $1.20, the coffee shop w
Julli [10]

Answer:

2.2

Explanation:

The formula for calculating price elasticity using the midpoint method is:

midpoint method = {(Q2 - Q1) / [(Q2 + Q1) / 2]} / {(P2 - P1) / [(P2 + P1) / 2]}

midpoint method = {(150 - 100) / [(150 + 100) / 2]} / {(1.20 - 1) / [(1.20 + 1) / 2]}

midpoint method = [50 / (250 / 2)] / [0.20 / (2.20 / 2)] = (50 / 125) / (0.20 / 1.1)  

midpoint method = 0.4 / 0.19 = 2.2

The advantage of using the midpoint method to calculate price elasticity is that we can calculate the price elasticity between two points, and it doesn't matter if the price increases or decreases.

If we calculate price elasticity using the single point formula:

price elasticity = % change in quantity supplied / % change in price = 50% / 20% = 2.5

7 0
3 years ago
Aberwald Corporation expects to sell 90,000 bags of lawn fertilizer annually. The optimal safety stock (which is on hand initial
UNO [17]

Answer:

Annual demand (U) = 90.000 bags

Cost of each bag = $1.50

Inventory carrying cost per unit(C) = $1.50 × 20% = 0 30

Ordering cost per unit (O) = $15

Part A)

EOQ = \sqrt{\frac{2UO}{C}}

EOQ = \sqrt{\frac{2 * 90000 * 15}{0.30}}

EOQ = \sqrt{9000000}

EOQ = 3,000

Part B)

Maximum inventory = EOQ + Safety inventory on hand  

Maximum inventory = 3000 + 1000

Maximum inventory = 4.000

Part C)

Average inventory = Maximum inventory + Minimum or Safety /2

Average inventory = 4,000 + 1,000 / 2

Average inventory =2,500

Part D)

How often company order = Annual demand / EOQ

How often company order = 90,000 / 3.000

How often company order = 30

4 0
3 years ago
Many homes are decorated in spring colors because these colors are deemed to be uplifting; however, most department stores do no
rusak2 [61]

Answer:

The answer is: B) Time utility

Explanation:

Time utility refers to the business practice of making products or services available during the times that they are most convenient or desirable for customers.

For example, stores are decorated differently for Halloween than for Christmas, and the products they sell are also different.

8 0
3 years ago
Other questions:
  • According to the ohio and u.s. constitutions, which responsibility is held by both the state of ohio and the federal government
    6·1 answer
  • Determine the total assets of Novak Corp. at December 31, 2020.
    5·1 answer
  • What is revenue on an income statement? Select one:
    13·1 answer
  • Miller Corporation has a premium bond making semiannual payments. The bond pays a coupon of 10 percent, has a YTM of 8 percent,
    7·1 answer
  • A property owner has agreed to allow a shopping mall access across her private road in order to allow shopping mall customers to
    11·1 answer
  • Auto pistons at Wemming​ Chung's plant in Shanghai are produced in a forging​ process, and the diameter is a critical factor tha
    7·1 answer
  • Solutions Group managers suggest that clients consider doing a resonance test when designing advertising, because this will help
    12·1 answer
  • You are saving money for a down payment on a house. Suppose you want to have total savings of $20,000 in 10 years time and you h
    5·1 answer
  • According to the standard cost card, each helmet should require 0.52 kilograms of plastic, at a cost of $8.00 per kilogram. Requ
    11·1 answer
  • Culver Company is involved in four separate industries. The following information is available for each of the four industries.
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!