Assume you have just purchased a corn futures contract - 5,000 bushels at $3.24 per bushel.What will your percentage profit on the cash investment be if the price of corn rises $ .10 per bushel in 4 months? Your initial margin requirement was $1,500.

Question

Quizplus · Accepted Answer

The profit per bushel is $0.10, so the total profit is 5,000 bushels * $0.10 = $500. The percentage profit on the cash investment (initial margin) is ($500 / $1,500) * 100% = 33.33%, which rounds to 33 percent.

Assume You Have Just Purchased a Corn Futures Contract -