Suppose that the value of the S& P 500 stock index is 1350.

a. If each futures contract costs $ 25 to trade with a discount broker, how much is the transaction cost per dollar of stock controlled by the futures contract?

b. If the average price of a share on the NYSE is about $ 40, how much is the transaction cost per “typical share” controlled by one futures contract?

c. For small investors, the typical transaction cost per share in stocks directly is about 10 cents per share. How many times the transactions costs in futures markets is this?