Question

Suppose you sell five March 2017 silver futures contracts on February 10, 2017, at the last price of the day. Use Table 23.1 a. What will your profit or loss be if silver prices turn out to be $17.81 per ounce at expiration? (Do not round intermed iate calculations. Enter your answer as a positive value rounded to the nearest whole number, e.g., 32.) b. What will your profit or loss be if silver prices are $17.64 per ounce at expiration? (Do not round intermediate calculations. Enter your answer as a positive value rounded to the nearest whole number, e.g., 32.) а. b. Profit Loss

Answer 1

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

А В C D 1 Silver March 2017 last settle price $17.741 2 Lot size of Silver future contract 5000 troy oz 4 No. of Silver Future contract sold 5 6 If silver prices on expiration Loss on future 7 a $17.81 per oz $1,725 8 9 10 b. If silver prices on expiration $17.64 per oz $2,525 Profit on future 11 12 13 LC LC

Cell reference -

A В C 1 Silver March 2017 last settle price 17.741 Lot size of Silver future contract 2 5000 3 troy oz 4 No. of Silver Future contract sold 5 6 7 a. If silver prices on expiration Loss on future 17.81 per oz -C7-С2)*С3*С5 8 9 10 b. If silver prices on expiration 17.64 per oz |-[C2-C10)*С3*C5 Profit on future 11 12 13 LC

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