How much margin must be put up for each contract sold

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Reference no: EM131070824

The margin requirement on the S&P 500 futures contract is 8%, and the stock index is currently 1,400. Each contract has a multiplier of $250.

a. How much margin must be put up for each contract sold? Margin $

b. If the futures price falls by 1% to 1,386, what will happen to the margin account of an investor who holds one contract? (Input the amount as a positive value.) Margin account by $ .

c-1. What will be the investor's percentage return based on the amount put up as margin? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.) Percentage return %

c-2. What would be the current cash balance in the margin account? Cash balance $

Reference no: EM131070824

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