Question

A company enters into a long futures contract to buy 1,000 units of a commodity for $60 per unit. The initial margin is $6,000 and the maintenance margin is $4,000. What futures price will allow $1,000 to be withdrawn from the margin account?

Answer 1

$61

Step-by-step explanation:

Calculation for What futures price will allow $1,000 to be withdrawn from the margin account

Let x be the futures price

Futures price =1000 units(x-$60 per units) = $1,000 loss

x-$60=$1,000/1000 units

x-$60 = $1

x=$60+$1

x = $61

Therefore the futures price that will allow $1,000 to be withdrawn from the margin account will be $61