Question 17 The March 2018 S&P futures index is reading 2270 while the cash market is 2250, the contract value of each index point is $100. You are convinced the cash market will rise by 10% by expiry. You are only prepared to buy or sell one futures contract i) Will you buy or sell a S&P futures contract ? [] (i) What is your profit (+) in dollars on expiry if you are correct? [1] (ii) What is your profit (+loss )if the futures price on expiry is 2100? [1.5] (iv) What is your profit +loss -if the futures price on expiry is 2000? [1.5] Question 18 (a) Explain the difference between "initial margin" and "variation margin" when applied to a futures contract. [4] (b) Do both parties have to pay variation margin on a futures contract? [I