What is the percentage return on the position

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Reference no: EM131983861

1. The futures price of gold is $250. Futures contracts are for 100 ounces of gold, and the margin requirement is $3,000 a contract. The maintenance market requirement is $1,500. A speculator expects the price of gold to rise and enters into a contract to buy gold. If the futures price of gold rises to $255, what is the percentage return on the position?

A) 166.67%

B) 33.33%

C) 2.00%

D) 16.67%

2. Suppose that an industrial building can be purchased today for $2,500,000. If it is expected to produce cash flows of $180,000 for each of the next five years (assume CFs are received at the end of each year) and can be sold at the end of the fifth year for $2,800,000, what is the internal rate of return (IRR) on this investment?

0.09%

4.57%

9.20%

10.37%

Reference no: EM131983861

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