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    Cumulative Rate of Return of Stocks

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    https://brainmass.com/economics/contracts/cumulative-rate-return-stocks-354465

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    Question one
    On Monday morning you sell one June T-bond futures contract at 97:27 or for $97843.75. The contracts face value is $100000. The initial margin requirement is $2700 and the maintenance margin requirement is $2000 per contract. Use the following data to answer the questions.
    Day Settle
    Monday $97 406.25
    Tuesday $98 000.00
    Wednesday $100 000.00

    1. What is the balance on your margin account after Mondays close?
    Date/Day Settlement Price ($) Mark-to-market Other entries Account Balance Explanation
    Monday morning $97,843.75 0 $2700 $2700 Initial margin deposit of $2700.
    Monday Closing $97,406.25 +$437.50 $3137.50 Price fell by 13/32 leaving profit by day end of $437.50
    The balance in the margin account after the Monday close will be $3137.50

    2. What is the cumulative rate of return on your investment at close of day on Tuesday?
    Date/Day Settlement Price ($) Mark-to-market Other entries Account Balance Explanation
    Monday morning $97,843.75 0 $2700 $2700 Initial margin deposit of $2700.
    Monday ...

    Solution Summary

    This solution solves the cumulative rate of return.

    $2.19

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