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Suppose you take a short futures position on cotton today, at a futures price of $0.80 per pound. Your account has an initial margin requirement
Suppose you take a short futures position on cotton today, at a futures price of $0.80 per pound. Your account has an initial margin requirement of 30%, and each contract is for 50 000 pounds. Calculate the rate of return (per period) on your investment if the price of cotton is $0.83 per pound at maturity A. -25.21% B. -12.50% C. -3.75% D. 3.75%.
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