Question
Please help with a question about futures. An S & P index futures contract pays $250 times the value of the index. In this problem,
Please help with a question about futures.
An S & P index futures contract pays $250 times the value of the index. In this problem, suppose there is an S & P 500 index futures contract that expires in March.
A) Suppose the closing price of the March futures contract is 963.30. What is the dollar value of this futures contract?
B) If the margin requirement is 10% of the futures price times the multiplier of $250, how much must an investor deposit with his/her broker in order to go long on the March contract?
C) If the futures price rises to $975, what is investor's gain in value from his/her long position?
D) What is his/her percentage return (assuming he/she maintains the minimum margin requirement?
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