FinTrade has just introduced a single-stock futures contract on Brandex stock, a company that currently pays no dividends. Each contract calls for delivery of 1,700 shares of stock in one year. The T-bill rate is 7% per year.

Required:

1. If Brandex stock now sells at $170 per share, what should the futures price be?
2. If the Brandex price drops by 5%, what will be the change in the futures price and the change in the investors margin account?
3. If the margin on the contract is $12,100, what is the percentage return on the investors position?