Calculate the profits and the rate of return on investment


A Speculator, expecting the British Pound to depreciate in the near future, sold short 10 British Pound, December futures at a price of $1.2945 per pound; one month later, he closed out the short position by buying back the futures at a price of $1.2796 per British Pound. The speculator put of 4.5% of the initial sale value as margin or equity. Please calculate the $ profits, and the rate of return on investment. There are 62,500 units in one British Pound futures contract.

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Financial Management: Calculate the profits and the rate of return on investment
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