b. A 2x leveraged product on Hang Seng Index has net value of $16,000,000+ $200,000 x...

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b. A 2x leveraged product on Hang Seng Index has net value of $16,000,000+ $200,000 x Y. Hang Seng Index is currently at 29,000. Hang Seng Index Futures and Mini-Hang Seng Index Futures have a contract multiplier of 50 and 10, respectively. i. How many futures should the fund of the leveraged product have to provide designated returns? (3 marks) ii. What are the leverage ratio and the expected tracking error? Round your answer to percentage with two decimal places. (3 marks) b. A 2x leveraged product on Hang Seng Index has net value of $16,000,000+ $200,000 x Y. Hang Seng Index is currently at 29,000. Hang Seng Index Futures and Mini-Hang Seng Index Futures have a contract multiplier of 50 and 10, respectively. i. How many futures should the fund of the leveraged product have to provide designated returns? (3 marks) ii. What are the leverage ratio and the expected tracking error? Round your answer to percentage with two decimal places. (3 marks)

Answer rating: 100% (QA)

i To calculate the number of futures contracts needed to provide the designated returns we first nee... View the full answer