A speculator opens a position in a futures contract in a, Ask an Expert

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A speculator opens a position in a futures contract in a 3-month banker's acceptance. At the time that the position is opened, the quoted price for a contract is 98.00 (one contract is for 1,000,000 banker's acceptance). The margin required to open the account is $500. One week later the quoted price on the futures contract is 98.10. The speculator closes the account. Find the speculator's one-week rate of return on the initial investment of 500.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92867159

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