Question 3 Mary Craft is expecting large capitalization stocks to rally by the end of the year while she is pessimistic about the performance of small capitalization stocks. She decides to go long on one December futures contract on the Dow Jones Industrial Average at a price of $9,020 and short on a December futures contract on the S&P Midcap 400 Index at a price of $369.40. The multiplier for a futures contact on the Dow is $10 and the multiplier for a futures contract on the S&P Midcap 400 Index is $500. At the end of the year when Craft closes her position, the price of the futures contract on the Dow Jones Industrial Average is $9,086 and the price of the future contract on the S&P Midcap 400 Index is $370.20. What is Craft's net gain or loss? HINT: TO CALCULATE YOUR RESULT, PLEASE NOTE THAT A MULTIPLIER REPRESENTS THE NUMBER OF UNITS ASSOCIATED WITH A PARTICULAR CONTRACT, WHICH HAPPEN TO BE MEASURED IN $ FOR STOCK INDEX FUTURES