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Suppose the S&P 500 index future price is currently $4,750, and the initial margin is 15%. You enter 5 futures contracts to sell the index,
Suppose the S&P 500 index future price is currently $4,750, and the initial margin is 15%. You enter 5 futures contracts to sell the index, and your position is marked to market weekly, and the maintenance margin is 85% of the initial margin. The continuously compounded risk-free interest rate is 4%. Determine whether you will receive a margin call if the S&P 500 index future price increases to $4,850 in one week. (6 points)
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