OneChicago has just introduced a single-stock futures contract on Brandex stock, a company that currently pays no dividends. Each contract calls for delivery of 2,200 shares of stock in 1 year. The T-bill rate is 6% per year.
a. If Brandex stock now sells at $180 per share, what should the futures price be? (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Futures price $
b. If the Brandex price drops by 3%, what will be the new futures price and the change in the investor’s margin account? (Round intermediate calculations and "Futures price (new)" answer to 3 decimal places and other answer to the nearest dollar amount. Negative amount should be indicated by a minus sign. Omit the "$" sign in your response.)
Futures price (new) $
Change in the investor’s margin account $
c. If the margin on the contract is $11,100, what is the percentage return on the investor’s position? (Round intermediate calculations. Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign. Omit the "%" sign in your response.)
Percentage return on the investor’s position %