Question
a. A long futures contract expiring after one year on the stock of ABC Limited was entered into today at the futures price of Rs.100
a. A long futures contract expiring after one year on the stock of ABC Limited was entered into today at the futures price of Rs.100 which was also the closing price of the day. There was a margin requirement of 25%. There was a margin call after 3 months and 8 months when amounts of Rs.20 and Rs. 15 were deposited respectively. You did not withdraw any amount from the margin account. The closing price on after one year was Rs.106. What is your profit considering that you borrowed the margin amount at 12% p.a. compounded continuously. Lot size is 50 shares
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started