The current value of an S&R futures is $1000. You buy 50 futures on the S&R...

 

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The current value of an S&R futures is $1000. You buy 50 futures on the S&R and the contract size is $500. The margin is settled on a weekly basis and the margin is 12.5% of the notional value. Margin calls are made as soon as the the margin is below 75% of the initial margin level. We assume that r = 5%. Use an Excel spreadsheet to calculate the profit over the whole period for a) Futures and b) Forward contract. The current value of an S&R futures is $1000. You buy 50 futures on the S&R and the contract size is $500. The margin is settled on a weekly basis and the margin is 12.5% of the notional value. Margin calls are made as soon as the the margin is below 75% of the initial margin level. We assume that r = 5%. Use an Excel spreadsheet to calculate the profit over the whole period for a) Futures and b) Forward contract.

Answer rating: 100% (QA)

ANSWER a Futures The profit on the futures contract over the whole period is 12500 b Forwar... View the full answer