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jayden6467
27.10.2020 •
Business
You buy a NYMEX WTI Crude Oil Futures 1,000 barrel contract at a price of $50 per barrel. You decide to buy on margin where the margin requirement is 20%. In November, the price of oil rises to $55 per barrel based on expectations that OPEC will reduce oil supplies. What will be your percentage profit or loss on the contract
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Ответ:
50% profit
Explanation:
Calculation for What will be your percentage profit or loss on the contract
Buying price = $50
Margin = 20%
November expected price = $55
First step is to calculate the Margin on the oil
Using this formula
Margin on the oil =Buying price*Margin
Let plug in the formula
Margin on the oil = $50 * 20%
Margin on the oil = $10
Second step is to calculate the Profit per barrel
Using this formula
Profit per barrel=November expected price -Buying price
Let plug in the formula
Profit per barrel = $55 - $50
Profit per barrel= $5
Last step is to calculate profit on the contract using this formula
Profit on the contract=Profit per barrel/Margin on the oil *100
Let plug in the formula
Profit on the contract= $5/$10 * 100
Profit on the contract= 50% profit
Therefore What will be your percentage profit on the contract is 50%
Ответ: