An Investor Bought a March S&P 500 Index Futures Contract

question 42

Multiple Choice

An investor bought a March S&P 500 Index futures contract in December for $1,490.05. After six months the contract value went up to $1,539.95. The contract has a multiplier of 250. With an initial margin of $20,000, what is the annualized percent return on margin?

• A)25.28%
• B)29.8%
• C)30.8%
• D)120.64%
• E)124.76%

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Definitions:

Cash Register Sales Tape

A continuous roll of paper used in cash registers to record sales transactions, providing a real-time sales record.

Invoice

A document sent by a provider of a product or service to the purchaser that specifies the amount due for the product delivered or service provided.

Advertising Brochure

A promotional document designed to introduce, explain, and market a company's products or services to potential buyers.

Cheque

A written, dated, and signed instrument that directs a bank to pay a specific sum of money to the bearer or a designated person.