Assume the Initial Margin on a Swiss Franc Futures Contract

question 45

Multiple Choice

Assume the initial margin on a Swiss franc futures contract is $2,000. If an individual purchases a contract at $0.78 per franc and the contract involves 125,000 Swiss francs, what return on invested capital will the investor receive if the price per franc moves to $0.80?

• A) 3%
• B) 50%
• C) 100%
• D) 125%

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Definitions:

Oligopoly Environment

A market structure characterized by a small number of firms that dominate the market, leading to limited competition.

Aircraft Manufacturers

Companies specializing in the design, manufacture, and/or assembly of airplanes and aircraft-related systems and parts.

Protected Monopoly

refers to a market or industry where a single provider is shielded from competition through legal means, such as regulations or patents.

Monopoly Environment

A market structure characterized by a single seller, selling a unique product in the market.