Suppose that the value of the S&P 500 stock index is 4,900. Required: a. If each...
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Suppose that the value of the S&P 500 stock index is 4,900. Required: a. If each E-mini futures contract (with a contract multiplier of $50) costs $25 to trade with a discount broker, how much is the transaction cost per dollar of stock controlled by the futures contract? Note: Do not round your intermediate calculations. Round your answer to 5 decimal places. b. If the average price of a share on the NYSE is about $60, how much is the transaction cost per "typical share" controlled by one futures contract? Note: Do not round your intermediate calculations. Round your answer to 5 decimal places. c. For small investors, a typical transaction cost (including the bid-ask spread) for direct trades in stocks might be about 10 cents per share. How many times the transactions costs in futures markets is this? Note: Do not round your intermediate calculations. Round your answer to 2 decimal places. a. Transaction cost per dollar b. Transaction cost per share c. Number of times % Suppose that the value of the S&P 500 stock index is 4,900. Required: a. If each E-mini futures contract (with a contract multiplier of $50) costs $25 to trade with a discount broker, how much is the transaction cost per dollar of stock controlled by the futures contract? Note: Do not round your intermediate calculations. Round your answer to 5 decimal places. b. If the average price of a share on the NYSE is about $60, how much is the transaction cost per "typical share" controlled by one futures contract? Note: Do not round your intermediate calculations. Round your answer to 5 decimal places. c. For small investors, a typical transaction cost (including the bid-ask spread) for direct trades in stocks might be about 10 cents per share. How many times the transactions costs in futures markets is this? Note: Do not round your intermediate calculations. Round your answer to 2 decimal places. a. Transaction cost per dollar b. Transaction cost per share c. Number of times %
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