Use the table for the question(s)below.

-Suppose oil futures prices are as given in the above table (price per barrel).Suppose you buy 100 crude oil futures contracts,each for 1000 barrels of crude oil,at the current futures price of $108 per barrel on day 0.What is your profit/loss in your margin account from the end of day 4 to the end of day 5?
A)-$300,000
B)$300,000
C)$400,000
D)-$400,000
E)$0

Question

Use the table for the question(s)below.
 
-Suppose oil futures prices are as given in the above table (price per barrel).Suppose you buy 100 crude oil futures contracts,each for 1000 barrels of crude oil,at the current futures price of $108 per barrel on day 0.What is your profit/loss in your margin account from the end of day 4 to the end of day 5?
A)-$300,000 
B)$300,000 
C)$400,000 
D)-$400,000 
E)$0

Quizplus · Accepted Answer

The profit/loss is calculated based on the change in futures price from day 4 to day 5. If the price decreases, you incur a loss. Assuming the price decreased by $3 per barrel (from $108 to $105), the loss is $3 * 1000 barrels * 100 contracts = $300,000.

Use the Table for the Question(s)below