Mary Craft is expecting large-capitalization stocks to rally close to the end of the year. She...
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Mary Craft is expecting large-capitalization stocks to rally close to the end of the year. She is pessimistic, however, about the performance of small-capitalization stocks, She decides to go long one December futures contract on the Dow Jones Industrial Average at a price of 9,020 and short one December futures contract on the S&P Midcap 400 Index at a price of 369.40. The multiplier for a futures contract on the Dow is $10, and the multiplier for a futures contract on the S&P Midcap 400 in $500 When Craft closes her position towards the end of the year, the Dow and S&P Midcap 400 futures prices are 9,086 and 370.20, respectively. How much is the net gain or loss to Craft? Mary Craft is expecting large-capitalization stocks to rally close to the end of the year. She is pessimistic, however, about the performance of small-capitalization stocks, She decides to go long one December futures contract on the Dow Jones Industrial Average at a price of 9,020 and short one December futures contract on the S&P Midcap 400 Index at a price of 369.40. The multiplier for a futures contract on the Dow is $10, and the multiplier for a futures contract on the S&P Midcap 400 in $500 When Craft closes her position towards the end of the year, the Dow and S&P Midcap 400 futures prices are 9,086 and 370.20, respectively. How much is the net gain or loss to Craft?
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Related Book For
Financial Accounting
ISBN: 978-0078025549
3rd edition
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann
Posted Date:
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