To calculate the minimum additional deposit required at the end of day 1, we need to calculate the initial margin, maintenance margin, and the loss in value of the futures contracts. Using these values, we can then calculate the minimum additional deposit required.
To calculate the minimum additional deposit required at the end of day 1, we need to first calculate the initial margin and the maintenance margin. The initial margin is 10% of the total value of the futures contracts, which is $3,924 * 3 * 0.10 = $1,177.2. The maintenance margin is 7% of the total value of the futures contracts, which is $3,924 * 3 * 0.07 = $825.48.
Next, we need to calculate the loss in value of the futures contracts due to the drop in the S&P 500 index. The loss in value is the difference between the initial value and the current value, which is $3,924 - $3,674 = $250.
To calculate the minimum additional deposit required at the end of day 1, we use the formula:
Minimum additional deposit = Loss in value / (1 + risk-free interest rate) = $250 / (1 + 0.03) = $242.7183. Therefore, the minimum additional deposit required at the end of day 1 is $242.72.