What is total investment return

Assignment Help Finance Basics
Reference no: EM132370332

You are fascinated by cryptocurrencies and open an account to trade bitcoin futures on CME. You long one futures contract and the contract size is 5 bitcoins. When you open the trade, the futures price is $7,000 per bitcoin. The initial margin is 47.3% of the futures price and the maintenance margin is 43%.

a) How much cash do you have to post as margin to open the position?

b) At the end of the first trading day, bitcoin rises to $7,500. How much cash is in your margin account after the daily settlement?

c) At the end of the second trading day, bitcoin drops to $6,440? Would you get a margin call? If yes, how much additional cash do you have to post?

d) Suppose you close your position at the end of the second day. What is your total investment return?

Reference no: EM132370332

Questions Cloud

How to improve the companys financial performance : Prepare a monthly operating budget for the first quarter with the following schedules. How to improve the companys financial performance.
What is the operating cash flow : Hailey, Inc., has sales of $19,750, costs of $9,280, depreciation expense of $1,950, and interest expense of $1,440. Assume the tax rate is 30 percent.
Security transport professionals incorporated : INFORMATION GOVERNANCE SEMESTER PROJECT - PHASE I Introduction to the Company: Security Transport Professionals Incorporated (STP),
Considering making an investment in a real estate : How much will the general partner distribute in year 7 in order to meet the 12% return expectation?
What is total investment return : Suppose you close your position at the end of the second day. What is your total investment return?
What is the pv of all costs from commuting : (a) What is the PV of all costs from commuting by a car? By a plane? (b) How much do you save in present value terms by commuting by a plane for the next year?
Discuss possible risk factors and impacts of infertility : The male factor contributes to infertility in 50% of couples who fail to conceive. Discuss the possible risk factors and likely impacts of male infertility.
Stated annual rate and effective annual rate : What is the stated annual rate and the effective annual rate of this short term loan?
Actual sales growth exceeds its sustainable rate of growth : Which of the following actions would help a firm's growth problem if its actual sales growth exceeds its sustainable rate of growth?

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the per member per month

FloridaCare HMO assumes that each 2,000 members will require 500 inpatient days of hospitalization. Furthermore, it plans to pay contracting hospitals $900 per inpatient day for care provided. What is the per member per month (PMPM) inpatient cost..

  The analyst used the overall beta to value

The risk-free rate is 2% and the implied equity premium is 6 %. Your firm's overall bottom-up unlevered beta is 1.2. When examining the latest valuations for a potential investment in a new factory, however, you notice that the analyst used the overa..

  What are the incremental free cash flow associated

Daily marginal tax rate is 35%. You are forecasting incremental free cash flows for Daily enterprises. What are the incremental free cash flow associated with the new machine?

  Explaining personal financial management techniques

Suppose your younger sister tells you that she now has a job that pays United State $1,300 per month, however, she is spending United State $1,700 per month and taking on more credit card debt to meet her monthly bills.

  What was the largest ipo

Initial Public Offerings. What was the largest IPO? Go to www.ipomonitor.com and find out. In what country was the company located?

  Are these reactions logically consistent

What are the key assumptions and predictions of the agency cost/contracting model of dividend payments? Are these predictions supported by empirical research findings?

  Straight-line depreciation and macrs depreciation

Compare and contrast straight-line depreciation and MACRS depreciation. Given the choice, would a firm prefer to use straight-line depreciation or MACRS depreciation? Why?

  Investors are generally risk averse and attach less risk

Which of the following is true of arguments for dividend relevance? Investors are generally risk averse and attach less risk to current dividends than future dividends or capital gains. A firm's value is determined solely by the earning power and r..

  Straight line upward sloping domestic supply curve

The country's government is considering reducing its export tax to $5 per ton , and it asks you to determine if this will reduce by half the inefficiency caused by the export tax.

  How can the result in market crashes

Pure expectation theory: Suppose that for whatever reason we are not able to attach the right rate to the right asset, how can this result in market crashes?

  Describe the ipo process then discuss the advantages and

describe the ipo process. then discuss the advantages and disadvantages of going public. provide

  Calculate the arc price elasticity of demand

Stinging Pesticides, corporation, provides scorpion control services, to residential and business customers in the El Paso area. The corporation recently raised its service price from $70 to $80 per yearly treatment.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd