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You expect the stock market to increase, but instead of acquiring stock, you decide to acquire a stock index futures contract. That index is
You expect the stock market to increase, but instead of acquiring stock, you decide to acquire a stock index futures contract. That index is currently 58.0, and the contract has a value that is $600 times the amount of the index. The margin requirement is $3,000. a. When you make the contract, how much must you put up? Round your answer to the nearest dollar. $ b. What is the value of the contract based on the index? Round your answer to the nearest dollar. $ c. If the value of the index rises 2 percent to 59.160, what is the profit on the investment? Round your answer to the nearest cent. $ What is the percentage earned on the funds you put up? Round your answer to one decimal place. % d. If the value of the index declines 2 percent to 56.840, what percentage of your funds will you lose? Round your answer to one decimal place. Enter your answer as a positive value. % e. What is the percentage you earn (or lose) if the index falls to 53.0? Round your answer to one decimal place. Enter your answer as a positive value. The percentage -Select- is %.
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