Exhibit 13-1 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

question 1

Multiple Choice

Exhibit 13-1
USE THE FOLLOWING INFORMATION FOR THE NEXT 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% on futures contracts. The current value of the S&P 500 stock index is 1178.
-Refer to Exhibit 13-1. 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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Definitions:

Political Activism

The effort to promote, impede, or direct social, political, economic, or environmental reform or stasis with the desire to make improvements in society.

Work Ethic

A set of values centered on the importance of hard work, diligence, and responsibility in achieving success.

Deferential

Showing respect and submission to someone else's opinion or judgment.

Directive

A type of guidance or instruction that directs or orders how something should be done or achieved.