Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. 11. three month e-mini real estate sector index fu

11. Three month E-Mini Real Estate Sector Index Futures contracts are currently trading at $240....

90.2K

Verified Solution

Question

Accounting

image

11. Three month E-Mini Real Estate Sector Index Futures contracts are currently trading at $240. Below are the prices of the contract for the next three months. Assuming a continuous annual risk-free rate of 3%, initial margin of 10% (maintenance margin 70% of initial), size of $250 x Index, and monthly marking to market (for one contract): Date Margin Balance Margin Calls Now 1 Price 240 225 220 215 2 3 a. Fill in the table above for margin balance and margin calls (6 points) b. What is the profit from the futures position? C. What is the profit from a similar forward position? d. BRIEFLY (1-2 sentences) explain why your answers to b and c are different

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students