Avid stock market investor for years

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Tori Reynolds has been an avid stock market investor for years. She manages her portfolio fairly aggressively and likes to? short-sell whenever the opportunity presents itself.? Recently, she has become fascinated with? stock-index futures, especially the idea of being able to play the market as a whole. Tori thinks the market is headed?down, and she decides to short sell some? S&P 500? stock-index futures. Assume she shorts 3 contracts at 1,387.95 and has to make a margin deposit of $19,688 for each contract. How much profit will she? make, and what will her return on invested capital be if the market does indeed drop so that the CME contracts are trading at 1,352.00 by the time they? expire? ? (The multiple on one? S&P 500 Index future contract is? $250.)

Reference no: EM131919729

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