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:

ERP System

Enterprise Resource Planning system, a software platform used by organizations to manage day-to-day business activities such as accounting, procurement, project management, and manufacturing.

FAIS

The Financial Advisory and Intermediary Services Act, a regulation aiming to protect consumers by regulating financial service providers in certain jurisdictions.

Lack of Communication

A situation where insufficient or ineffective exchange of information leads to misunderstandings or conflicts.

Acquire Goods

The process of obtaining physical or digital products through purchase, lease, or barter to support an organization's operations or inventory.