You expect the stock market to increase, but instead of acquiring stock, you decide to acquire a stock index futures contract. That index is currently 60.4, and the contract has a value that is $500 times the amount of the index. The margin requirement is $2,500. When you make the contract, how much must you put up? Round your answer to the nearest dollar. $ What is the value of the contract based on the index? Round your answer to the nearest dollar. $ If the value of the index rises 2 percent to 61.608, what is the profit on the investment? Round your answer to the nearest cent. $ What is the percentage earned on the funds you put up? Round your answer to one decimal place. % If the value of the index declines 2 percent to 59.192, what percentage of your funds will you lose? Round your answer to one decimal place. Enter your answer as a positive value. % What is the percentage you earn (or lose) if the index falls to 55.4? Round your answer to one decimal place. Enter your answer as a positive value. The percentage is %.
You expect the stock market to increase, but instead of acquiring stock, you decide to acquire a stock index futures contract. That index is currently 60.4, and the contract has a value that is $500 times the amount of the index. The margin requirement is $2,500. When you make the contract, how much must you put up? Round your answer to the nearest dollar. $ What is the value of the contract based on the index? Round your answer to the nearest dollar. $ If the value of the index rises 2 percent to 61.608, what is the profit on the investment? Round your answer to the nearest cent. $ What is the percentage earned on the funds you put up? Round your answer to one decimal place. % If the value of the index declines 2 percent to 59.192, what percentage of your funds will you lose? Round your answer to one decimal place. Enter your answer as a positive value. % What is the percentage you earn (or lose) if the index falls to 55.4? Round your answer to one decimal place. Enter your answer as a positive value. The percentage is %.
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 expect the stock market to increase, but instead of acquiring stock, you decide to acquire a stock index futures contract. That index is currently 60.4, and the contract has a value that is $500 times the amount of the index. The margin requirement is $2,500.
- When you make the contract, how much must you put up? Round your answer to the nearest dollar.
$
- What is the value of the contract based on the index? Round your answer to the nearest dollar.
$
-
If the value of the index rises 2 percent to 61.608, what is the profit on the investment? Round your answer to the nearest cent.
$
What is the percentage earned on the funds you put up? Round your answer to one decimal place.
%
- If the value of the index declines 2 percent to 59.192, what percentage of your funds will you lose? Round your answer to one decimal place. Enter your answer as a positive value.
%
- What is the percentage you earn (or lose) if the index falls to 55.4? Round your answer to one decimal place. Enter your answer as a positive value.
The percentage is %.
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