Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider an investment that is long 40 S&P 500 Index futures contracts at a price of $3,100.00. The initial margin requirement is $36,000 per contract

image text in transcribed

Consider an investment that is long 40 S&P 500 Index futures contracts at a price of $3,100.00. The initial margin requirement is $36,000 per contract and the maintenance margin is $30,000 per contract. The annual risk-free rate is zero. Upon opening the position of long 40 S&P 500 Index futures contracts, you deposit $3.2 million in your futures trading account. At what S&P 500 Index futures price will a margin call occur? Round your numerical answer to the nearest interest dollar. Consider an investment that is long 40 S&P 500 Index futures contracts at a price of $3,100.00. The initial margin requirement is $36,000 per contract and the maintenance margin is $30,000 per contract. The annual risk-free rate is zero. Upon opening the position of long 40 S&P 500 Index futures contracts, you deposit $3.2 million in your futures trading account. At what S&P 500 Index futures price will a margin call occur? Round your numerical answer to the nearest interest dollar

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Budget Bible Budgeting Made Simple

Authors: Jessica Charise Brant, Adrienne Homet Hand

ISBN: 979-8218059880

Students also viewed these Accounting questions