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guapka [62]
3 years ago
14

You enter into a short crude oil futures contract at $43 per barrel. The initial margin is $3,375 and the maintenence margin is

$2,500. One contract is for 1,000 barrels of oil. By how much do oil prices have to change before you receive a margin call
Business
1 answer:
Wewaii [24]3 years ago
8 0

Answer:

The correct answer is "43.875". A further explanation is provided below.

Explanation:

The given values are:

Initial margin,

= $3,375

Maintenance margin,

= $2,500

Barrels of oil,

= 1,000

Now,

The loss on the position will be:

= 3375-2500

= 875 ($)

then,

⇒  1000 (P - 43) = 875

⇒  1000P-43000=875

On adding "43000" both sides, we get

⇒  1000P-43000+43000=875+43000

⇒                             1000P=43875

⇒                                    P=\frac{43875}{1000}

⇒                                        =43.875

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