Mock Test 4th Nov

naresh.thkr
Good Student
Posts: 25
Joined: Sat Aug 11, 2012 7:02 pm

Mock Test 4th Nov

Postby naresh.thkr » Tue Nov 06, 2012 9:17 am

An investor has a short future contract on the stock of Glaceau Ltd. He entered into the contract at $90.Each contract has 25 stocks with a current market value of $2250. The initial margin for the contract was 800 and maintenance margin is $ 550. At what price of the stock, the investor will get a margin call:
Choose one answer.
a. $80
b. $ 100
c. $ 75
d. $105
In this question answer should be ( d ) but correct answer is ( c ) and explanation says ( b). I guess there is something wrong in explanation. Correct me if i am wrong.

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balajismz
Finance Junkie
Posts: 63
Joined: Mon Nov 05, 2012 9:13 am

Re: Mock Test 4th Nov

Postby balajismz » Tue Nov 06, 2012 9:27 am

Yes, what you have mentioned is right, reckon they will award marks accordingly

Balaji

content.pristine
Finance Junkie
Posts: 356
Joined: Wed Apr 11, 2012 11:26 am

Re: Mock Test 4th Nov

Postby content.pristine » Thu Nov 08, 2012 1:27 pm

Answer B is Correct!!!
The question Says "Short" so A and C are NOT the answer.
Any value ABOVE $100 will give you a margin call.. but NOT $100.
Hence $105 is the answer 8-)

8-)

I know its a bit tricky. However, this is certainly an exam type quesions

8-)

naresh.thkr
Good Student
Posts: 25
Joined: Sat Aug 11, 2012 7:02 pm

Re: Mock Test 4th Nov

Postby naresh.thkr » Fri Nov 09, 2012 3:20 pm

Hi Pristine,

Thats wht i have said, here answer should be 105 and not the other options.

A/c to Explanation its 100. I dnt know how they have calculated.

Any way we both are on same page.

Thanks.
Naresh


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