What will futures price need to be for margin call to occur

Assignment Help Financial Management

Reference no: EM131071451

Consider an investment in five S&P 500 Index futures contracts at a price of $924.80. The initial margin requirement is 15.0% and the maintenance margin is 10.0%. If the continuously compounded interest rate is 5.0% what will the futures price need to be for a margin call to occur 10 days from now? Assume no settlement within the 10 days.

A) $852.64

B) $872.79

C) $898.63

D) $905.25

Reference no: EM131071451

Questions Cloud

Understand teaching styles and learning styles : Design Your Process for Becoming a "World-Class" Engineering Student One potential definition for engineering is "the design of products or processes to meet desired needs." In engineering education, most of the focus is on designing products. Thr..

Development of a creative message strategy : Explain why you decided on each of these elements and how they will contribute to the development of a creative message strategy.

Consider bear spread strategy : Consider a bear spread strategy using Augsut 160 and 170 calls. What is the maximum possible loss per one option?

Firm has zero debt and an annual cost of capital : A firm has zero debt and an annual cost of capital of 15%. If the firm is considering new capital structure that will include 35% in debt at 8.5% what is the cost of equity of the new leveraged firm assuming no tax or other impacts?

What will futures price need to be for margin call to occur : Consider an investment in five S&P 500 Index futures contracts at a price of $924.80. The initial margin requirement is 15.0% and the maintenance margin is 10.0%. If the continuously compounded interest rate is 5.0% what will the futures price need t..

What trends in cost of good sold and gross profit do you see : What does your company produce? What trends in sales, cost of goods sold, and gross profit do you see? Diversity in a products: comments on divisions and other reporting entities.

Recruitment and selection process : Write a research proposal on Topic: Recruitment and Selection process: An evaluation of E-recruitment at Marks and Spencer,

Marketplace situation analysis : Analyze the internal and external influences of the integrated marketing communications (IMC) of your Coke (soda) product. Analysis should include the following:

What is the frequency of tides at any location : What causes tides? Why are some tides higher than others? What is the frequency of tides at any location? Be sure to cite your references using correct APA formatting.

User Account

All Pages