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11. Three month E-Mini Real Estate Sector Index Futures contracts are currently trading at $240. Below are the prices of the contract for the next
11. Three month E-Mini Real Estate Sector Index Futures contracts are currently trading at $240. Below are the prices of the contract for the next three months. Assuming a continuous annual risk-free rate of 3%, initial margin of 10% (maintenance margin 70% of initial), size of $250 x Index, and monthly marking to market (for one contract): Date Margin Balance Margin Calls Now 1 Price 240 225 220 215 2 3 a. Fill in the table above for margin balance and margin calls (6 points) b. What is the profit from the futures position? C. What is the profit from a similar forward position? d. BRIEFLY (1-2 sentences) explain why your answers to b and c are different
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