Please show how to get these answers.
Please show how to get these answers. A company enters into long futures contracts to buy...
Problem 2.2. A company has a short position in futures contract to sell 5,000 bushels of wheat. The company had entered into the contract when the futures price was 225 cents per bushel. The initial margin is $3,000 and the maintenance margin is $2,000. The current futures price is 250 cents per bushel and the margin account balance is $3,250. (a) Determine the net margin deposits to or margin withdrawals from the margin account so far. (6) What price change...
The futures price of corn is $3.10 a bushel. Futures contracts for corn are based on 9,000 bushels, and the margin requirement is $2,000 a contract. You expect the price of corn to fall and sell the contract short. What is the value of the contract and how much must you initially remit? Round your answers to the nearest dollar. Value of the contract: $ _______ Remit amount: $ _________ If the futures price of corn rises to $3.19, what...
Louis deposits $80,000 of margin and takes a short position in 80 corn futures contracts, covering 5000 bushels each, on Monday. Louis' trade price and the closing futures price on Monday are both $3.9050 per bushel. The initial and maintenance margins are $1000 and $800, respectively, per contract. The daily interest rate is 1.1 basis points per day on Monday and Tuesday and 1.2 bp per day on Wednesday. There are no transaction costs. On Tuesday, Wednesday and Thursday, the...
A company enters into a long futures contract to buy 1,000 units of a commodity for $20 per unit. The initial margin is $6,000 and the maintenance margin is $4,000. What futures price will allow $2,000 to be withdrawn from the margin account?
You purchased 18 August 13 futures contracts on soybeans at a price quote of 1,059′6. Each contract is for 5,000 bushels with the price quoted in cents and 1/8 ths of a cent per bushel. Assume the contract price is 1,069′4 when you close out your contract six weeks from now. What will be your total profit or loss on this investment?
show all work. show all calculations. 1. A food processing company knows that it will buy 1 million bushels of corn in three months. The standard deviation of the change in the price per b of bushel over a 3-month period is calculaed 0.055 (5.5%). The company chooses to hedge by buying futures contracts on corn. The sandard deviation of the change in the futures price over 3-month period is 0.065 (6.5%) and the coefficient of correlation between the 3-month...
3. A. You buy seven copper futures at $2.79 per pound, where the contract size is 25,000 pounds. At contract maturity, copper is selling for $2.72 per pound. What is your profit or (loss) on the transaction? B. You sell two aluminum futures at $2,332 per metric ton, where the contract size is 25 metric tons. At contract maturity, aluminum is selling for $2,315 per metric ton. What is your profit or (loss) on the transaction? C. You buy 200...
AutoSave OFF DA S U w margins_example-2 Q Search in Document Home Insert Draw Design Layout References Mailings Review View Share Comments Times New... 12A A Aa AO Ev B I Uab X, X? APA E SE All D AaBbCcDdE AaBbCcDdE AaBbCcDc AaBb CcDdEt AaBb No Spacing Heading 1 Heading 2 Title O AaBb CcDdEt AaBbCcDdEt AaBbCcDdE Subtitle S ubtle Emph. Emphasis Paste Normal Styles Pane Setup You are a manager of a grain elevator. You buy 10,000 bushels of...
Please show how to get this answer Trader A entered into 10 futures contracts to buy gold for $1,100 an ounce in December. Trader B bought 10 call options to buy gold for $1,120 in December. The cost of the option was $25.00 per ounce. Gold's contract size is 100 troy ounces. Calculate for both traders total profit/loss from the position if GOLD price in December will be $1,040. O A A:+$60,000. B: +$25,000 O B A:-$60,000. B:-$25,000. O C...
Use the following information for questions 27 – 29. Bill is a corn farmer in the Texas Panhandle. He has a 10 year average corn production of 25,000 bushels on his farm. At no time in the past 5 years has that production dropped below 15,000 bushels. On March 5, Bill notices the December CBOT corn futures are trading at $4.178 per bushel. This is a much higher price than Bill has seen in the past and he wants to...