Assume that you buy a single stock futures (SSF) of ABC Company with total initial margin of $2,000 in April 2020 to hedge the optential risk. The settlement price on the purchasing day was $4.00. The initial margin of each SSF is $200 while the contract size of the SSF is 1,000 shares of ABC Company. In May 2020, you have close-up the position when the settlement price increases to $4.50. During the period, the balance of your account was below the maintenance margin twice and you were asked to top up $2,000. Identify the return on the invested capital for the futures investment.
Assume that you buy a single stock futures (SSF) of ABC Company with total initial margin of $2,000 in April 2020 to hedge the optential risk. The settlement price on the purchasing day was $4.00. The initial margin of each SSF is $200 while the contract size of the SSF is 1,000 shares of ABC Company. In May 2020, you have close-up the position when the settlement price increases to $4.50. During the period, the balance of your account was below the maintenance margin twice and you were asked to top up $2,000. Identify the return on the invested capital for the futures investment.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Assume that you buy a single stock futures (SSF) of ABC Company with total initial margin of $2,000 in April 2020 to hedge the optential risk. The settlement price on the purchasing day was $4.00. The initial margin of each SSF is $200 while the contract size of the SSF is 1,000 shares of ABC Company.
In May 2020, you have close-up the position when the settlement price increases to $4.50. During the period, the balance of your account was below the maintenance margin twice and you were asked to top up $2,000.
Identify the
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