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In April, Jim Johnson forecasts that interest rates will decrease over the next month. He purchases a T-bond futures contract with a June settlement date
In April, Jim Johnson forecasts that interest rates will decrease over the next month. He purchases a T-bond futures contract with a June settlement date at 110.00. He pays an initial margin of $5,000 for the contract. In June, he closes out his position by selling a T-bond futures contract with a June settlement at 112.00. Calculate Jim's rate of return.
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