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NEW QUESTION: 1
Mary A.Contrary holds a SHORT position in 15 heating oil futures contracts. Her initial margin is IM =
$ 32,652.90, and her maintenance margin is MM = $24,475.50. Each contract is for 42,000 gallons of heating oil, and her initial futures price was Finitial = $1.036 per gallon. At what price will Ms. Contrary receive a margin call (ignoring tick size restrictions)?
A. $1.0275 per gallon
B. none of these answers.
C. $1.049 per gallon
Answer: C
Explanation:
(-24,475.50 + 32,652.90 + (15)(42,000)(1.036))/(15)(42,000) = 1.049