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5. Suppose the S&P 500 index is currently at 2800 and the initial margin for a futures contract is 15%. You wish to enter into
5. Suppose the S&P 500 index is currently at 2800 and the initial margin for a futures contract is 15%. You wish to enter into 6 of these contracts. The margin balance earns 8% ( compounded continuously). mames What is the notional value and initial margin? a. What is the margin balance after one week (1/52 yr.) if the index at that time is 2830 (weekly settlements)? b. If the maintenance margin is 80 % of the initial balance, what must the index drop to trigger C. a margin
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