(A)
Adequate information:
Current level of index = 2000
Risk-free interst rate = 0.5% per month
Dividend-yield on the index = 0.2% per month
Multiplier = $50
To evaluate:
Cash flow from mark-to-market proceeds on the contract
Introduction:
Mark to market (MTM) is a measure of the fair value of accounts that can change over time, such as assets and liabilities. Mark to market aims to provide a realistic appraisal of an institution's or company's current financial situation
(B)
Adequate information:
Initial margin on the contract = $10,000
To evaluate:
Holding period return
Introduction:
Holding period return is the total return received from holding an asset or portfolio of assets over a period of time, generally expressed as a percentage. Holding period return is calculated on the basis of total
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