Question
The margin requirement on the S&P 500 futures contract is 10%, and the stock index is currently 1,800. Each contract has a multiplier of $50.
The margin requirement on the S&P 500 futures contract is 10%, and the stock index is currently 1,800. Each contract has a multiplier of $50.
a. How much margin must be put up for each contract sold? Margin _______ b. If the futures price falls by 2% to 1,764, what will happen to the margin account of an investor who holds one contract? (Input the amount as a positive value.) Margin account _____ (increases/decreases) by _______ c-1. What will be the investor's percentage return based on the amount put up as margin? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.) Percentage return _______%
c-2. What would the current cash balance in the margin account? Cash balance ______
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