Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

only need part c answered. the rest is correct, thank u. OneChicago has just introduced a new single stock futures contract on the stock of

only need part c answered. the rest is correct, thank u.
image text in transcribed
image text in transcribed
OneChicago has just introduced a new single stock futures contract on the stock of Brandex, a company that currently pays no dividends. Each contract calls for delivery of 3,000 shares of stock in one year. The T-bill rate is 4% per year. Required: a. If Brandex stock now sells at $290 per share, what should the futures price be? (Round your answer to 2 decimal places.) b. Brandex stock now sells at $290 per share. If the Brandex stock price drops by 2.0%, what will be the new futures price and the change in the investor's margin account? (Input all amounts as positive values. Do not round intermediate calculations. Round your answers to 2 decimal places.) c. Brandex stock now sells at $290 per share. If the margin on the contract is $60.000, what is the percentage return on the investor's position, if the Brandex stock price drops by 2.0% ? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.)

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_2

Step: 3

blur-text-image_3

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

Managerial Finance Essentials

Authors: Charles O. Kroncke, Alan E. Grunewald, Erwin Esser Nemmers

2nd Edition

0829901590, 978-0829901597

More Books

Students also viewed these Finance questions

Question

=+a) Was this an observational study or an experiment?

Answered: 1 week ago

Question

Draw a schematic diagram of I.C. engines and name the parts.

Answered: 1 week ago

Question

Recount the fundamental assumptions of the muted group theory

Answered: 1 week ago

Question

Compare and contrast monochronic and polychronic time orientations

Answered: 1 week ago

Question

Compare and contrast cultural preferences for privacy

Answered: 1 week ago