Question #2: Futures Contracts The chart below shows a quote for a futures contract on the NASDAQ 100 Index Delivery Date Futures Price NASDAQ 100 November 2020 9325.75 (a) This futures contract is an example of a(n) contract. Circle yŅır answer. No explanation is required Financial Futures Commodity Futures Interest Rate Futures Currency Futures (b) Assume that for the NASDAQ Futures contract the futures price is multiplied by a multiple of $100 to get the total contract value. If the margin requirement is 7%, how much must you deposit into your margin account to purchase three (3) November 2020 NASDAQ contracts? (c) Suppose the day after you purchased the 3 contracts, the NASDAQ 100 Index rises to 9400. What will happen to your margin account? (d) Suppose the NASDAQ 100 Index futures price rises by 5%. What is the percentage return on your investment on the 3 futures contracts?
Question #2: Futures Contracts The chart below shows a quote for a futures contract on the NASDAQ 100 Index Delivery Date Futures Price NASDAQ 100 November 2020 9325.75 (a) This futures contract is an example of a(n) contract. Circle yŅır answer. No explanation is required Financial Futures Commodity Futures Interest Rate Futures Currency Futures (b) Assume that for the NASDAQ Futures contract the futures price is multiplied by a multiple of $100 to get the total contract value. If the margin requirement is 7%, how much must you deposit into your margin account to purchase three (3) November 2020 NASDAQ contracts? (c) Suppose the day after you purchased the 3 contracts, the NASDAQ 100 Index rises to 9400. What will happen to your margin account? (d) Suppose the NASDAQ 100 Index futures price rises by 5%. What is the percentage return on your investment on the 3 futures contracts?
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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Transcribed Image Text:Question #2: Futures Contracts
The chart below shows a quote for a futures contract on the NASDAQ 100 Index
Delivery Date
Futures Price
NASDAQ 100
November 2020
9325.75
(a) This futures contract is an example of a(n)
contract. Circle yŅır answer. No
explanation is required
Financial Futures
Commodity Futures
Interest Rate Futures
Currency Futures
(b) Assume that for the NASDAQ Futures contract the futures price is multiplied by a multiple of $100
to get the total contract value. If the margin requirement is 7%, how much must you deposit into your
margin account to purchase three (3) November 2020 NASDAQ contracts?
(c) Suppose the day after you purchased the 3 contracts, the NASDAQ 100 Index rises to 9400. What
will happen to your margin account?
(d) Suppose the NASDAQ 100 Index futures price rises by 5%. What is the percentage return on your
investment on the 3 futures contracts?
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