You took the long position in a 6-month futures contract on 1,000 units of a stock index. Thefollowing are given:i) Your initial margin deposit was 45,000ii) The continuously compounded interest rate is 5%iii) The contract is marked-to-market every dayiv) The maintenance margin is 70% of the initial margin.The index futures price for 6 days is as follows:Day 0: 1200Day 1: 1210Day 2: 1220Day 3: 1230Day 4: 1240Day 5: 1250Day 6: 1260Determine the account value (rounded to the nearest integer) in Oliver's margin account at theend of 6 days.O A. 104,942О В. 105,000O C. 105,008O D. 105,058O E. 105,070

Margin accounts are marked to market everyday and the balances are adjusted by either adding the…

Answered: Determine the account value (rounded to…

Determine the account value (rounded to the nearest integer) in Oliver's margin account at the end of 6 days. O A. 104,942 O B. 105,000 OC. 105,008 O D. 105,058 O E. 105.070

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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Question

You took the long position in a 6-month futures contract on 1,000 units of a stock index. The
following are given:
i) Your initial margin deposit was 45,000
ii) The continuously compounded interest rate is 5%
iii) The contract is marked-to-market every day
iv) The maintenance margin is 70% of the initial margin.
The index futures price for 6 days is as follows:
Day 0: 1200
Day 1: 1210
Day 2: 1220
Day 3: 1230
Day 4: 1240
Day 5: 1250
Day 6: 1260
Determine the account value (rounded to the nearest integer) in Oliver's margin account at the
end of 6 days.
O A. 104,942
О В. 105,000
O C. 105,008
O D. 105,058
O E. 105,070

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