Francesca Cipriani considers herself a shrewd investor. She is considering a short position in March Italian Electricity

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Francesca Cipriani considers herself a shrewd investor. She is considering a short position in March Italian Electricity futures, which are currently trading for €50.5. Her analysis suggests that the March futures will trade at €45 in a couple of months.


Assuming that her expectations hold up, what kind of return on capital will she make if she shorts five March electricity contracts (each covers 744 MWh) by depositing an initial margin of €1,000 per contract?

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Related Book For  answer-question

Fundamentals Of Investing

ISBN: 9780135175217

14th Edition

Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk

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