An index futures contract has a notional value of 100,000 and requires a performance bond of 5,000. Fill the worksheet: the leverage (notional over margin, as a multiple), the dollar change in the position’s value when the index moves 2 %, and that change as a fraction of the performance bond (enter as a decimal, e.g. 0.25).
An index futures contract has a notional value of 100,000 and requires a performance bond of 5,000. Fill the worksheet: the leverage (notional over margin, as a multiple), the dollar change in the position’s value when the index moves 2 %, and that change as a fraction of the performance bond (enter as a decimal, e.g. 0.25).
Answer
Leverage (×) → 20 · Dollar move on a 2 % index change → 2000 · As a fraction of the margin → 0.4
Cells - Leverage (×) · ±0.01 - Dollar move on a 2 % index change · ±0.01 · unit $ - As a fraction of the margin · ±0.0001 `=100000/5000` = 20; `=100000*0.02` = 2,000; `=2000/5000` = 0.40. The dollar move is not amplified — 2 % of the notional is 2,000 whoever holds it — but on 5,000 of capital it is a 40 % swing. That ratio is what “leveraged” means.
OpenStax, Introduction to Business (CC BY 4.0) §16.6 — derivative and user shape only; OpenStax Principles of Finance §20.1–20.2 — reference only; cdcc.ca / m-x.ca — MX lists, CDCC clears (verified-facts §2.3 B11 and §2.4 J16, CONFIRMED 2026-09-17); original company and figures