In June 2022, Johnny Sprinter purchased one September Share Price Index (SPI) 200 futures contract. At the time the SPI 200 index was at 4939, and the interest rate was 12.7% pa. Most firms have been performing very well on a consistent basis over the last few years, and so the dividend yield was expected to be quite high, around 8.1% pa. It is now September, and September futures are currently trading for 5156. 

Determine the profit or loss Johnny will make by closing out his position on the September Futures he purchased, assuming futures were priced fairly?

Answer rating: 100% (QA)

To calculate Johnnys profit or loss we need to calculate the initial value of the futures contract a... View the full answer