Homework Answers
Profit from one contract = ($1.46 - $1.29)*19000 = $3230
Profit from 43 contract = 43*$3230 = $138890
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(1 point) A trader enters into a short forward on cotton for 43 contracts with delivery...
A trader enters into a short forward on cotton for 37 contracts with delivery in 17...
A trader enters into a short forward on cotton for 37 contracts with delivery in 17 months. The forward price is $0.55 per pound. The delivery size is 18000 pounds. What is the trader's profit if the price of cotton in 17 months is $0.51 per pound?
A trader buys 10 Put Option contracts (1 contract is 100 shares) on AAPL with March...
A trader buys 10 Put Option contracts (1 contract is 100 shares) on AAPL with March 2019 expiration and strike price $150. The price of the option was $4.50. What are trader's potential gains and losses? O A Unlimited loss, gain is limited to $4,500 O B ossis limited to $150,000, gain is limited to $4,500. O C Unlimited profit, loss is limited to $4,500 O D Profit is limited to $145,500, loss is limited to $4,500
NEED HELP WITH THSI QUESTION!! WITH EXPLANATIONS On July 1, an American auto dealer enters into...
NEED HELP WITH THSI QUESTION!! WITH
EXPLANATIONS
On July 1, an American auto dealer enters into a contract to purchase 20 British sports cars with payment to be made in pounds on November 1. Each car costs 35,000 pounds. The dealer is concerned that the pound will strengthen over the next few months. The dealer plans to trade in December pound futures contracts. The December pound futures price is $1.278 per pound. Each contract is for delivery of 62,500 pounds....
4. On July 1, an American auto dealer enters into a contract to purchase 20 British sports cars with payment to be made in pounds on November 1. Each car costs 35,000 pounds. The dealer is concerned that the pound will strengthen over the next few months.
On July 1, an American auto dealer enters into a contract to purchase 20 British sports cars with payment to be made in pounds on November 1. Each car costs 35,000 pounds. The dealer is concerned that the pound will strengthen over the next few months. The dealer plans to trade in December pound futures contracts. The December pound futures price is $1.278 per pound. Each contract is for delivery of 62,500 pounds. How many contracts should the...
JP Morgan Chase writes a forward contract to sell 10 million pounds sterling at the delivery...
JP Morgan Chase writes a forward contract to sell 10 million pounds sterling at the delivery price of $1.6247 per pound in 30 days’ time. At the end of the contract the spot exchange rate was $1.65 per pound. What was the profit to JP Morgan Chase? The current spot price of a non-dividend paying stock is $65, while the simple interest rate is 4.50 percent per year. Consider a forward contract written on this stock with a maturity of...
Please show work 1) A trader entered into a long S&P index futures contract when the...
Please show work 1) A trader entered into a long S&P index futures contract when the futures price is 3,112 and closed it out when the futures price is 3,075. What is his gain or loss in dollars? The contract multiplier is $250. Write your answer in the format as 10000 or -10000, no dollar sign, no comma. 2) A trader entered into 2 short British Pound futures contracts @ $1.6 per GBP, and closed out his position @ $1.71...
IFO Simulation Review By Duke @ Masterability Question 1 Part A: A trader buys two July...
IFO Simulation Review By Duke @ Masterability Question 1 Part A: A trader buys two July futures contracts on frozen orange juice. Each contract is for the delivery of 15,000 pounds. The current futures price is 160 cents per pound, the initial margin is $6,000 per contract, and the maintenance margin is $4,500 per contract. (a) What price change would lead to a margin call? (5 points) (b) Under what circumstances can $2,000 be withdrawn from the margin account? (5...
(1 point) 1) Suppose you enter into a short 6-month forward position at a forward price...
(1 point) 1) Suppose you enter into a short 6-month forward position at a forward price of $45. What is the payoff in 6 months for prices of $33, $39, $45, $49, $53 ? When price is $33, the payoff is $ When price is $39, the payoff is $ When price is $45, the payoff is $ When price is $49, the payoff is $ When price is $53, the payoff is $
Exercise 3. A short forward contract on a dividend-paying stock was entered some time ago. It currently has 9 months to maturity. The stock price and the delivery price is s25 and $24 respectively. T...
Exercise 3. A short forward contract on a dividend-paying stock was entered some time ago. It currently has 9 months to maturity. The stock price and the delivery price is s25 and $24 respectively. The risk-free interest rate with continuous compounding is 8% per annum. The underlying stock is expected to pay a dividend of $2 per share in 2 months and an another dividend of $2 in 6 months. (a) What is the (initial) value of this forward contract?...
Question 19 (1 point) You are short an oil forward. When you sold the forward, oil...
Question 19 (1 point) You are short an oil forward. When you sold the forward, oil price was $59. Oil price increased to $66 at forward expiration. Forward price is $60. What is your profit? 0-6 0 1 06 Question 20 (1 point) One-month gold future trades at $1560 right now. Risk-free rate is 2%. Infer the current spot price. Pick the closest value. O 1563 O 1554 1557 O 1560
A trader buys 10 Put Option contracts (1 contract is 100 shares) on AAPL with March 2019 expiration and strike price $150. The price of the option was $4.50. What are trader's potential gains and losses? O A Unlimited loss, gain is limited to $4,500 O B ossis limited to $150,000, gain is limited to $4,500. O C Unlimited profit, loss is limited to $4,500 O D Profit is limited to $145,500, loss is limited to $4,500
NEED HELP WITH THSI QUESTION!! WITH
EXPLANATIONS
On July 1, an American auto dealer enters into a contract to purchase 20 British sports cars with payment to be made in pounds on November 1. Each car costs 35,000 pounds. The dealer is concerned that the pound will strengthen over the next few months. The dealer plans to trade in December pound futures contracts. The December pound futures price is $1.278 per pound. Each contract is for delivery of 62,500 pounds....
IFO Simulation Review By Duke @ Masterability Question 1 Part A: A trader buys two July futures contracts on frozen orange juice. Each contract is for the delivery of 15,000 pounds. The current futures price is 160 cents per pound, the initial margin is $6,000 per contract, and the maintenance margin is $4,500 per contract. (a) What price change would lead to a margin call? (5 points) (b) Under what circumstances can $2,000 be withdrawn from the margin account? (5...
(1 point) 1) Suppose you enter into a short 6-month forward position at a forward price of $45. What is the payoff in 6 months for prices of $33, $39, $45, $49, $53 ? When price is $33, the payoff is $ When price is $39, the payoff is $ When price is $45, the payoff is $ When price is $49, the payoff is $ When price is $53, the payoff is $
Exercise 3. A short forward contract on a dividend-paying stock was entered some time ago. It currently has 9 months to maturity. The stock price and the delivery price is s25 and $24 respectively. The risk-free interest rate with continuous compounding is 8% per annum. The underlying stock is expected to pay a dividend of $2 per share in 2 months and an another dividend of $2 in 6 months. (a) What is the (initial) value of this forward contract?...
Question 19 (1 point) You are short an oil forward. When you sold the forward, oil price was $59. Oil price increased to $66 at forward expiration. Forward price is $60. What is your profit? 0-6 0 1 06 Question 20 (1 point) One-month gold future trades at $1560 right now. Risk-free rate is 2%. Infer the current spot price. Pick the closest value. O 1563 O 1554 1557 O 1560
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