A silver futures contract requires the seller to deliver 5,000 Troy ounces of silver. An investor sells one July silver futures contract at a price of $8 per ounce, posting a $2,025 initial margin. If the required maintenance margin is $1,500, the price per ounce at which the investor would first receive a maintenance margin call is closest to: A. $5.92. B. $7.89. C. $8.11. D. $10.80.

is it 7.89?

The answer is: C

No. You are selling at 8, so you lose if price goes up (buying high and selling low). Price goes up to 8.11, you lose $550, and get a margin call.

I was saying no to Priyanka. Cavil is right.

thank hoffmag for correcting…

Just wondering, what is the exact answer everyone is getting? I know the answer is C, but I’m getting an increase in $0.13 to $8.13. Anyone actually getting $8.11? BTW, the formula I’m using is: (x) * (8) * (500) = 525

initial margin-maintenance margin= how much the contract must increase in price for a margin call to be received 2,025-1500=525, which is a 525/5,000=0.105 (say 0.11) increase in price per ounce, for a price of 8+0.11=8.11

Makes sense, thanks.