Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please please help asap OneChicago has just introduced a single-stock futures contract on Brandex stock, a company that currently pays no dividends. Each contract calls

please please help asap
image text in transcribed
image text in transcribed
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 2,200 shares of stock in 1 year. The T-bill rate is 6% per year. a. If Brandex stock now sells at $180 per share, what should the futures price be? (Round your answer to 2 decimal places.) b. If the Brandex price drops by 3%, what will be the new futures price and the change in the investor's margin account? (Round "Futures price (new)" answer to 3 decimal places and other answer to the nearest dollar amount. Negative amount should be indicated by a minus sign.) b. If the Brandex price drops by 3%, what will be the new futures price and the change in the investor's margin account? (Round "Futures price (new)" answer to 3 decimal places and other answer to the nearest dollar amount. Negative amount should be indicated by a minus sign.) c. If the margin on the contract is $11,100, what is the percentage return on the investor's position? (Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign.)

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

Step: 3

blur-text-image

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

The Oxford Handbook Of Computational Economics And Finance

Authors: Shu-Heng Chen, Mak Kaboudan, Ye-Rong Du

1st Edition

0199844372, 978-0199844371

More Books

Students also viewed these Finance questions