Question

Your utility company will need to buy 100,000 barrels of oil in 10 days, and it is worried about fuel costs Suppose you go long 100 oil futures contracts, each for 1000 barrels of oil, at the current futures price of $50 per barrel. Suppose futures prices change each day. The daily prices are shown in the graph to the right and in the accompanying table. Complete parts (a) through (c) below EEB Click the icon to view the futures data table 10 11 Day a. What is the marking-to-market profit or loss (in dollars) that you will have on each date? (Round to the nearest dollar.) Futures Data Gain/Loss on mark Cumulative Gain/Loss Gain/Loss on mark Cumulative Gain/Loss Day Price ($) 0 50.00 149.50 2 47.50 3 47.75 4 47.95 5 49.45 to market (S) (S) Day Price (S) to market (S) Day Price (S) 0 50.00 1 49.50 2 47.50 3 47.75 4 47.95 5 49.45 Day Price (S) 6 50.45 7 50.70 8 49.70 9 52.20 10 52.70 50.45 7 50.70 49.70 952.20 10 52.70 Enter your answer in the edit fields and then click Check Answer. Print Done Clear All

Answer 1

1. Serial Number	Gain/Loss	Cumulative Gain/ Loss
   1	49.50 - 50 = (0.50)	(0.5)
   2	49.50 - 47.50= 2	1.5
   3	47.50 - 47.75 = (0.25)	1.25
   4	47.75 - 47.95 = (0.2)	1.05
   5	47.95 - 49.45 = (1.5)	(0.45)
   6	49.45 - 50.45 = (1)	(1.45)
   7	50.45 - 50.70 = 0.25	(1.2)
   8	50.70 - 49.70 = 1	(0.2)
   9	49.70 - 52.20 = (2.5)	(2.7)
   10	52.20 -52.70 = (0.5)	(3.2)