Fred has just sold short 3 contracts of may wheat on the, Ask an Expert

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Fred has just sold short 3 contracts of May wheat on the CBT. These are 5,000 bushel contracts. The initial deposit is $1,500 per contract with a maintenance margin of $1,200.

(a) What is Fred's total initial margin?

(b) How much of an increase in the price of wheat is necessary to cause a margin call?

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Financial Management, Finance

Category:- Financial Management
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