Exhibit 20.1 Use the Information Below for the Following Problem(S)

question 98

Multiple Choice

Exhibit 20.1
Use the Information Below for the Following Problem(S)
December futures on the S&P 500 stock index trade at 250 times the index value of 1187.70. Your broker requires an initial margin of 10% percent on futures contracts. The current value of the S&P 500 stock index is 1178.
-Refer to Exhibit 20.1.Suppose at expiration the futures contract price is 250 times the index value of 1170.Disregarding transaction costs,what is your percentage return?

• A) 1.87%
• B) -0.68%
• C) -14.90%
• D) 10.36%
• E) None of the above

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As Is

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Merchant

An individual or company engaged in the buying and selling of goods for profit.

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A document that provides instructions, specifications, and guidelines for the operation, maintenance, or understanding of a specific system or product.

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