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OneChicago has just introduced a single-stock futures contract on Brandex stock, a company that currently pays no dividends. Each contract calls for delivery of 1000
OneChicago has just introduced a single-stock futures contract on Brandex stock, a company that currently pays no dividends. Each contract calls for delivery of 1000 shares of stock in 1 year. The T-bill ate is 6% per year. 1. If Brandex stock now sells at $120 per share, what should the futures price be? 2. If the Brandex price drops by 3%, what will be the change in the futures price and the change in the nvestor's margin account? 3. If the margin on the contract is $12,000, what is the percentage return on the investor's position
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