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
Viktor [21]
2 years ago
5

A grain elevator operator bought a futures contract for 5,000 kilograms of rice at $1.50 per kilogram. The initial margin is $4,

000 and the maintenance margin is $2,000. (a) What change in (i) balance of margin account and (ii) price per kilogram will lead to a margin call? (b) Calculate the price per kilogram at which the margin call will be issued. (c) Calculate change in (i) balance of margin account and (ii) price per kilogram at which $2,000 could be withdrawn from the margin account. (d) Calculate the price per kilogram at which $2,000 could be withdrawn from the margin account.
Business
1 answer:
Inessa05 [86]2 years ago
3 0

Answer:

Given that,

Operator bought a futures contract = 5,000 kilograms of rice at $1.50 per kilogram

Initial margin = $4,000

Maintenance margin = $2,000

(a)

(i) Balance of Margin = Initial margin - maintenance margin

                                  = $4,000 - $2,000

                                  = $2,000 (loss)

(ii) Change in price = \frac{2,000}{5,000}

                               = $0.40

(b) Price per kilogram = Current price - Change in Price

                                     = $1.50 - $0.40

                                     = $1.10

So, change price per kg is $1.10

(c) Balance of Margin = Initial margin - maintenance margin

                                  = $4,000 + $2,000

                                  = $6,000 (loss)

Change in price = \frac{2,000}{5,000}

                               = $0.40

(d) Price per kg = Current price - change in price

                          = $1.50 + $0.40

                          = $1.90

You might be interested in
3. What role did CDS play in the financial crisis?
ehidna [41]

Just like an insurance policy, a CDS allows purchasers to buy protection against an unlikely event that may affect the investment. ... During the financial crisis of 2008, the value of CDS was hit hard, and it dropped to $26.3 trillion by 2010 and $25.5 trillion in 2012.

7 0
3 years ago
Once a company has prepared an adjusted trial balance it is ready to prepare financial statements. Which financial statement is
Sloan [31]

Answer:

A

Explanation:

There is a sequence of preparing statements of financial statements because some statements use information from other statements of financial position. The income statement does not require information from any other statements. The retained earnings need information from income statement to calculate current retained earnings. The balance sheets require information from statement of retained earnings(retained earnings for this period).

8 0
3 years ago
Lipstik, Inc. makes cosmetics. Lipstik intentionally mislabels its packaged products to conceal a defect. Trusting and relying o
Zanzabum

Answer:

Fraud.

Explanation:

Fraud is defined as intentional misrepresentation aimed at gaining unlawful advantage or to deprive a victim of a legal right.

In civil law the victim can file for recovery of money, while in criminal law the fraud perpetrator may be committed to prison.

Lipstik intentionally mislabels its packaged products to conceal a defect, and gains unfair advantage by selling these defective goods to customers. Mikayla buys the lipstick based on the misrepresented information on the label and gets injured.

8 0
2 years ago
22. Which one of the following is correct regarding the utilization of a good without an alternative use?
photoshop1234 [79]

Answer:

it's 2 opportunity cost will increase

thank uh

8 0
1 year ago
A five-year project has a projected net cash flow of $15,000, $25,000, $30,000, $20,000, and $15,000 in the next five years. It
riadik2000 [5.3K]

The value of Net present value is $12,895.45.

Given that

initial investment = $50,000

1st-year cash flow = $15,000

2nd-year cash flow =$ 25,000

3rd-year cash flow =$ 30,000

4th-year cash flow = $20,000

5th-year cash flow = $15,000

rate = 20%

using formula

NPV = \frac{R}{({1+i})^t}

NPV = \frac{15000}{({1+0.20})^5}\\NPV = 12895.45

<h3>What is Net Present value?</h3>
  • The current value of a future stream of payments from a business, project, or investment is determined using net present value, or NPV.
  • You must predict the timing and size of future cash flows in order to determine NPV, and you must choose a discount rate that is equal to the least allowable rate of return.
  • Your cost of capital or the rewards offered by substitute investments with comparable risk may be reflected in the discount rate.
  • Positive NPV indicates that the rate of return on a project or investment will be higher than the discount rate.
  • to learn more about Net present value with the given link

brainly.com/question/14293955

#SPJ4

4 0
1 year ago
Other questions:
  • Mitchell's money income is $150, the price of X is $2, and the price of Y is $2. Given these prices and income, Mitchell buys 50
    12·1 answer
  • True or false travel expenses are by far the largest item in a typical campaign budget today
    13·1 answer
  • How many combinations of 6 different 10th grade subjects can tyler choose from the 9 subjects offered?
    9·1 answer
  • You are considering an investment in a mutual fund with a 4% load and expense ratio of 0.5%. You can invest instead in a bank CD
    10·1 answer
  • Wanderlust gave a security interest in his Conestoga wagon to Iowa Bank, which perfected its security interest by filing a finan
    15·1 answer
  • Positive Messages and the Writing Process
    12·1 answer
  • Heidi is an energy drink salesperson. When selling her firm's drinks in the United States, she emphasizes how they will give con
    15·1 answer
  • Insight Guides,a line of travel books,provides travelers with background information about people's beliefs,values,and customs i
    11·1 answer
  • Explain what nuclear medicine technologists and magnetic resonance technologists have in common.
    6·1 answer
  • A job sample performance test requires that the applicant actually do a sample of the work that the job involves. Which of the f
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!