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7. (5 points) Suppose you short 2 futures contracts of SwF 125,000 at a price of...
Assume that futures contracts have zero initial margins and no daily margin calls. That is, you...
Assume that futures contracts have zero initial margins and no daily margin calls. That is, you pay nothing or get nothing when you enter a position in the futures contracts. You pay the entire futures price when you accept delivery of the underlying asset. You get the entire futures price when you make delivery of the underlying asset. Lastly, you pay your entire loss or get your entire profit on your futures position when you close the position with an...
The futures price of corn is $3.10 a bushel. Futures contracts for corn are based on...
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...
Today you go long on 3 December contracts of lean hog futures, at a price of...
Today you go long on 3 December contracts of lean hog futures, at a price of 59.6 cents per pound. One contract is for 40K pounds. One month later, December futures are trading at 44.9 cents per pound. If you close out your position at this time, what is your profit from this position?
Suppose that you SHORT FIVE May 2016 Gold futures contracts at the opening price of $1,119.40/oz on May 4, 2019. You close out your position on May 8, 2019 at a price of $1,110.50/oz. The initial mar...
Suppose that you SHORT FIVE May 2016 Gold futures contracts at the opening price of $1,119.40/oz on May 4, 2019. You close out your position on May 8, 2019 at a price of $1,110.50/oz. The initial margin and the maintenance margin requirements are $4,400 per contract and $4,000 per contract, respectively. Contract size is 100 troy ounces per contract. Assume that you deposit the initial margin in cash for the FIVE contracts sold and did not withdraw the excess on...
You purchased 18 August 13 futures contracts on soybeans at a price quote of 1,059′6. Each...
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?
7 points Q1. Which of the following are characteristics of forward and/or futures contracts or neither?...
7 points Q1. Which of the following are characteristics of forward and/or futures contracts or neither? Forward Contract Futures Contract A contract relating to a transaction at a future date. Require traders to provide margin. Are traded over the counter. Are guaranteed by a clearing house. Have asymmetric pay-offs. Are usually standardised contracts. Profit or loss is realised only on maturity.
7 points Q1. Which of the following are characteristics of forward and/or futures contracts or neither?...
7 points Q1. Which of the following are characteristics of forward and/or futures contracts or neither? Forward Contract Futures Contract A contract relating to a transaction at a future date. Require traders to provide margin. Are traded over the counter. Are guaranteed by a clearing house. 0 0 0 Have asymmetric pay-offs. Are usually standardised contracts Profit or loss is realised only on maturity
The futures price of gold is $1,000. Futures contracts are for 100 ounces of gold, and...
The futures price of gold is $1,000. Futures contracts are for 100 ounces of gold, and the margin requirement is $3,000 a contract. The maintenance market requirement is $1,500. A speculator expects the price of gold to rise and enters into a contract to buy gold. a. How much must the speculator initially remit? b. If the futures price of gold rises to $1,005, what is the profit and return on the position? c. If the futures price of gold...
4. Forward and Futures Prices A. (6 points) Suppose the stock price is $35 and the...
4. Forward and Futures Prices A. (6 points) Suppose the stock price is $35 and the continuously compounded interest rate is 5%. What is the 6-month forward price, assuming dividends are zero? B. (6 points) If the forward price is $35.50, what is the annualized continuous dividend yield? 5. Forward and Futures Prices Suppose you are a market-maker in S&R index forward contracts. The S&R index spot price is 1100, the risk-free rate is 5%, and the dividend yield on...
In February 2019, Adam longed six December futures contracts on wheat at $8.2/bu where the size...
In February 2019, Adam longed six December futures contracts on wheat at $8.2/bu where the size of one contract is 5000 bushels. Later in August 2019, he entered into a short position on three November futures contracts on corn for $8.28/bu. In September 2019 he shorts six November futures contracts on wheat for $8.32/bu and finally in October 2019, he longs three December futures contracts on corn for $8.34/bu. 5. www ww Does Adam need to deliver or collect any...
Assume that futures contracts have zero initial margins and no daily margin calls. That is, you pay nothing or get nothing when you enter a position in the futures contracts. You pay the entire futures price when you accept delivery of the underlying asset. You get the entire futures price when you make delivery of the underlying asset. Lastly, you pay your entire loss or get your entire profit on your futures position when you close the position with an...
Today you go long on 3 December contracts of lean hog futures, at a price of 59.6 cents per pound. One contract is for 40K pounds. One month later, December futures are trading at 44.9 cents per pound. If you close out your position at this time, what is your profit from this position?
7 points Q1. Which of the following are characteristics of forward and/or futures contracts or neither? Forward Contract Futures Contract A contract relating to a transaction at a future date. Require traders to provide margin. Are traded over the counter. Are guaranteed by a clearing house. Have asymmetric pay-offs. Are usually standardised contracts. Profit or loss is realised only on maturity.
7 points Q1. Which of the following are characteristics of forward and/or futures contracts or neither? Forward Contract Futures Contract A contract relating to a transaction at a future date. Require traders to provide margin. Are traded over the counter. Are guaranteed by a clearing house. 0 0 0 Have asymmetric pay-offs. Are usually standardised contracts Profit or loss is realised only on maturity
4. Forward and Futures Prices A. (6 points) Suppose the stock price is $35 and the continuously compounded interest rate is 5%. What is the 6-month forward price, assuming dividends are zero? B. (6 points) If the forward price is $35.50, what is the annualized continuous dividend yield? 5. Forward and Futures Prices Suppose you are a market-maker in S&R index forward contracts. The S&R index spot price is 1100, the risk-free rate is 5%, and the dividend yield on...
In February 2019, Adam longed six December futures contracts on wheat at $8.2/bu where the size of one contract is 5000 bushels. Later in August 2019, he entered into a short position on three November futures contracts on corn for $8.28/bu. In September 2019 he shorts six November futures contracts on wheat for $8.32/bu and finally in October 2019, he longs three December futures contracts on corn for $8.34/bu. 5. www ww Does Adam need to deliver or collect any...
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