Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Risk Management Expert

Assume that you enter into a long futures contract to purchase May gasoline for $0.80 per gallon on the New York Commodity Exchange. The size of the contract is 42,000 gallons. The initial margin requirement is $2,000 and the maintenance margin is $1,500. What change in the futures price will lead to the margin call?

Risk Management, Finance

  • Category:- Risk Management
  • Reference No.:- M922043

Have any Question? 


Related Questions in Risk Management

A column in the wall street journal warns be wary of

A column in the Wall Street Journal warns: "Be wary of long-term bonds. We run the risk of inflation in due course. Longer-term bonds are most at risk." What effect would an increase in expected inflation have on bond pr ...

Identify and explain the primary methods of managing credit

Identify and explain the primary methods of managing credit risk for derivatives dealers ? Identify and explain four forms of netting ? Critique each of the three methods of calculating Value at Risk, giving one advantag ...

1 what are some of the types of risk that should be

1. What are some of the types of risk that should be considered when analyzing real estate? 2. What is the difference between business risk and financial risk? 3. Why is the variance (or standard deviation) used as a mea ...

1 what are io and po strips which tends to be more volatile

1. What are IO and PO strips? Which tends to be more volatile in price? Why? 2. In what ways is a CMBS structure different from a CMO backed by residential mortgages? Why is default F risk in a CMBS offering given more a ...

1 how do sinking funds reduce default risk2 what is a

1. How do sinking funds reduce default risk? 2. What is a trustee? Why do bondholders insist that a trustee be included in all public bond offerings? Why are these less necessary in private debt placements? 3. What impac ...

As we discussed in the chapter futures can be used to

As we discussed in the chapter, futures can be used to eliminate systematic risk in a stock portfolio, leaving it essentially a risk-free portfolio. A portfolio manager can achieve the same result, however, by selling th ...

Why is it necessary to compute the present value when

Why is it necessary to compute the present value when assessing the cost of financing for two alternatives? Is the risk from issuing a floating-rate Eurobond higher or lower than the risk of issuing a fixed-rate Eurobond ...

In each of the following situations what risk do you face

In each of the following situations, what risk do you face from price fluctuations? What would have to be true of a derivatives security if the security were to help you to hedge this risk? a. You are a corn farmer b. Yo ...

What is the risk-return relationship involved in the firms

What is the risk-return relationship involved in the firm's asset-investment decisions pertaining to working capital management? Why are these concepts important to business leaders in Saudi Arabia? Search the library or ...

Discussionnist and risk governance and risk management

Discussion "NIST and Risk Governance and Risk Management" Please respond to the following: • NIST provides many procedures and much guidance on IT and information security-related topics. o Assess if NIST is too large an ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro