You Buy a Standard & Poor's 500 Index Futures Contract

question 39

Essay

You buy a Standard & Poor's 500 Index futures contract at 1,200.40.The multiplier is 250.The margin is $21,000.The margin maintenance requirement is set at $17,250.
A.If the contract closes out at 1,230.70,what is your dollar return? What is your percent return on margin?
B.If the contract value goes down from $1,240.00 to $1,180.00,will you be called upon to put up more funds?

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Definitions:

Battery

A device composed of one or more electrochemical cells that store and provide electrical energy through chemical reactions.

Voltage

The electric potential difference between two points in a circuit, which drives the current flow.

Conductors

Materials or objects that allow the flow of electrical current in one or more directions.

Amps

Short for amperes, a unit of measure for electrical current strength.