Question

XYZ Inc. decides to use aluminum futures contracts to fully hedge a payment of 125 tons of aluminum that's due in four days. Each futures contract has 25 tons of aluminum attached and carries an initial and maintenance margin of $3400 and $2500, respectively. The futures price was $1625/ton the day XYZ opened its futures position. The table below shows the futures prices for the four days immediately after XYZ opened its position.

Day 1	Day 2	Day 3	Day 4
$1627	$1622	$1616	$1621

1.Find XYZ's ending margin balance on Day 2.  Assume deficits are eliminated to keep the position open and excesses remain in the account.

2.Find XYZ's ending margin balance on Day 3. Assume deficits are eliminated to keep the position open and excesses remain in the account.

3. Find the total amount of variation margin that occurred from days 1-4. Do not use currency symbols or words when entering your response..

4. Suppose that XYZ closes its futures position at the end of Day 4 when the spot price and futures price were both $1621/ton. Find the total amount XYZ paid for the 125 tons of aluminum. Do not use currency symbols or words when entering your response.

5.Suppose that XYZ could not find aluminum futures contracts that expired in four days and was forced to hedge their payment with aluminum futures that expired in three days. Find the total amount XYZ paid for the 125 tons of aluminum if the spot price and futures price were $1614 and $1616/ton on day 3, respectively.

I really need help how to solve these!! please and thank you

Answer 1