An investor enters into a long oil futures contract when the futures price is $18.0 per barrel. The contract size if 100 barrels of oil. How much does the investor gain or lose if the oil price at the end of the contract equals $16.75?
Q: A one year gold futures contract is selling for $1,685. Spot gold prices are $1,610 and the one year…
A: fair value of futures = Spot rate * (1+risk free rate )^n
Q: Mr. Saso holds a short position in euros through five March futures contracts, with each contract…
A: Short position means sell now shares and buy them in future and settle the deal. Contract size =…
Q: Suppose that bond ABC is the underlying asset for a futures contract with settlement six months from…
A: The price of a futures contract will be calculated by use of the cost and carry model , based on the…
Q: If you purchase a $100,000 interest-rate futures contract for 110, and the price of the Treasury…
A: The answer and the explanation is provided below:
Q: The following table shows the futures price data today for Commodity X, and you purchased a futures…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: You created and sold a futures contract 25 days ago. The contract at that time had a price of $60…
A: The rate of return of an investment with zero risk is known as the risk-free rate of return. It can…
Q: Today I enter a long position of 500 ounces in GCZ22 at the futures price of $1,850 per ounce. By…
A: The future contracts refer to financial derivates that oblige the buyer to purchase some underlying…
Q: Suppose you decided to enter into a futures contract involving a stock that sells for Php888.75 per…
A: Here, Stock Price per share is Php 888.75 Total no. of Shares is 1000 shares Initial Margin…
Q: A trader took a short position on 122 European call options (lot size: 100 securities in one option…
A: When you take short positions than you will get profit if the prices goes below the strike price of…
Q: The futures price of a commodity such as wheat is $2.50 a bushel. Futures contracts are for 10,000…
A: Given, Futures price = $2.5 a bushel No.of contracts = 10,000 bushels Margin requirement = $2500 per…
Q: It is now June. A company knows that it will sell 5,000 barrels of crude oil in September. It uses…
A: Short position is one of the strategy that is used in market. Under this, stocks or securities are…
Q: Assume that on Friday August 1, you buy one Chicago Board of Trade September Treasury bond futures…
A: Opening price = 97800 Initial margin = 2500 Settlement price = 97400
Q: Suppose that you enter into a short futures contract to sell July silver for $17.20 per ounce. The…
A: Spot Price of Silver contract is $17.20 Size of contract is 5,000 initial margin is $4000…
Q: You enter into a futures arrangement to purchase 40 Alpacas. The futures price is $8400/Alpaca. You…
A: Futures : Futures contracts are derivatives contracts where the price at which the underlying can be…
Q: If the initial speculative margin of a futures contract is $2,000, the maintenance margin is $1,800…
A: Several trading accounts these days provide the facility of margin trading. It essentially means…
Q: An investor buys a futures contract an asset when the futures price is $1,500. Each contract is on…
A: A long position in future (i.e buy today sell later) would be profitable if price rises and would be…
Q: Q16: "If you purchase a $100,000 interest-rate futures contract for 105, and the price of the…
A: Profit = (Price at Expiration - Purchase Price ) * 1000
Q: ,000, the interest rate or ‘risk-free’ rate is -0.50% and the dividend yield on the DAX index is…
A: *Answer:
Q: Suppose an investor takes a long position in 1 Gold futures contract, and the following information…
A: Note: This post has two distinct questions. The first has been answered below.
Q: A company enters into a short futures contract to sell 50,000 units of a commodity for 70 cents per…
A: Short position refers to selling position held by investor whereas Long position relates to purchase…
Q: The Mexican peso futures contract is trading at 0.07713 $/MXN. Contract size for the Mexican peso…
A: Futures contract: It is a legal contract to either buy or sell at a fixed price a certain asset or…
Q: An investor enters into a long oil futures contract when the futures price is S18.0 per barrel. The…
A: A futures contract fixes the price at which transaction will be executed in the future.
Q: On November 21, you bought one December maturity S&P 500 index futures contract at the futures price…
A: Given Information: Future Price of one contract = $2057. Future Price on December 8 = $2179…
Q: Futures are available on 3 month T bills with a contract size of $2 million. If you take a long…
A: Gain =selling price less long price
Q: Consider the following prices, volume and open interest for gold futures contracts. Contract size:…
A: Value of contract GCG22(Feb'22) is Last price is 1,713.0 Contract size is 100oz Value of contract =…
Q: A gold futures contract requires the long trader to buy 100 troy ounces of gold. The initial margin…
A: Future contract requires the long trader to buy 100 troy ounces of goldInitial…
Q: Today a trader enters into a long position in one July 2021 silver futures contract. The current…
A: Given, Trader enters into a long position it means - Trader Bought july 2021 Silver futures…
Q: index future contract involves buying and selling the stock index for a specified price at a…
A: There are buying and selling on stock index futures in future markets there large amount of risk and…
Q: Bruce bought a bank bill with a face value of $1 million, priced to yield 3.30 per cent per annum…
A: Face value of the bill $1,000,000 Yield per annum 3.30% Monthly yield 3.30% / 12 months =…
Q: What is the implied nominal interest rate on a 10-year U.S. T-notes ($100,000)futures contract that…
A: The formula to calculate the equivalent market price is, P=Qp100×F Where, Par value is represented…
Q: an investor bought a one-year forward contract with price F0(T) = 110. Six months later, at Time t =…
A: Forward contracts are used for the hedging purposes and prevents the loss due to volatile price.
Q: 1. Suppose a financial asset, ABC, is the underlying asset for a futures contract with settlement of…
A: The price at which trading is done in the future is term as the futures price.
Q: Consider a 6-months futures contract on gold. We assume no income and that $1 per ounce per 6-months…
A: The current market price at which a specific asset, such as securities, commodities, or currencies,…
Q: e a futures price of Php5000 at the start of the transaction, with Php250 initial margin requirement…
A: Given, Position taken = Long, A margin call would be made when balance in account falls below…
Q: An investor has taken 50 short positions on a futures contract with a starting time of 4 TL per…
A: A contract price refers to the price which is listed in the contract happened between the two…
Q: An investor sells 10 call options with an exercise price of $35 for a price of $5.00 per each…
A: Investor gain or loss will price at expiry minus exercise price minus amount paid for contract
Q: Suppose a oil producer wants to hedge against possible price fluctuations in the market. For…
A: Basis in derivative market is very important.
Q: On January 1, you sold one April S&P 500 index futures contract at a futures price of 1775. If the…
A: The question is based on the concept of Derivatives
Q: What is the implied interest rate on a Treasury bond ($100,000) futures contract that settled at…
A: Treasury bond futures contract settled at 100 16 / 32% of $100,000Number of bonds = [$100,000 /…
Q: Suppose a financial asset, ABC, is the underlying asset for a futures contract with settlement of 6…
A: Futures contract: An agreement in which parties agree to exchange the asset for cash at a…
Q: The multiplier for a futures contract on a stock market index is $50. The maturity of the contract…
A: a. Calculation of the initial future price at the current level is as follows: Calculation of the…
Q: Let’s say a CBOT 10-year U.S. Treasury note futures contract has a quoted price of 103-18. If annual…
A: The future is a option instrument that is buy to purchase or sell at a specific price at future.
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- The contract size for platinum futures is 50 troy ounces. Suppose you need 450 troy ounces of platinum and the current futures price is $820 per ounce. How many contracts do you need to purchase? How much will you pay for your platinum? What is your dollar profit if platinum sells for $870 a troy ounce when the futures contract expires? What if the price is $770 at expiration?If the initial speculative margin of a futures contract is $2,000, the maintenance margin is $1,800 and your trading account balance has increased to $2,300, how much must you deposit to comply with your margin requirement?Suppose that you enter into a short futures contract to sell July silver for $17.20 per ounce. The size of the contract is 5,000 ounces. The initial margin is $4,000, and the maintenance margin is $3,000.What change in the futures price will lead to a margin call?What happens if you do not meet the margin call?
- The contract size for platinum futures is 50 troy ounces. Suppose you need 500 troy ounces of platinum and the current futures price is $2,000 per ounce. What is your dollar profit/loss if platinum sells for $2,050 a troy ounce when the futures contract expires? What's the answer?? a- Loss 1,250,000 b- Profit 1,250,000 C-Loss 2,500 d- Profit 2,500The Mexican peso futures contract is trading at 0.07713 $/MXN. Contract size for the Mexican peso future is 500,000 pesos. You believe the spot price will be 0.08365 $/MXN at expiration. What speculative position would you enter into to profit from your beliefs? Calculate your anticipated profits assuming you take a position in three contracts. What is the size of your profit or loss if the futures price is indeed an unbiased predictor of the future spot price and this price materializes? Do problem 1 again assuming you believe the spot price will be 0.07061 $/MXN.A one-year gold futures contract is selling for $1,247. Spot gold prices are $1,200 and the one-year risk-free rate is 2%. a) According to spot-futures parity, what should be the futures price? b) What risk-free strategy can investors use to take advantage of the futures mispricing, and what would be the profits from that strategy?
- A futures contract will mature in one time step. The current return over one time-step is R = 1.01 and the underlying asset of the future contract is currently worth $27 and has up factor u = 1.1 and down factor d = 0.9. The margin account for the short side of this futures contract currently holds $16. How much will the margin account hold when the futures contract matures if the underlying asset increases in value?The futures price of a commodity such as wheat is $2.50 a bushel. Futures contracts are for 10,000 bushels, and the margin requirement is $2,500 a contract. The maintenance market requirement is $1,000. A speculator expects the price of the commodity to rise and enters into a contract to buy wheat. a. How much must the speculator initially remit? b. If the futures price rises to $2.60, what is the profit and return on the position? c. If the futures price declines to $2.47, what is the loss on the position?You have decided to purchase 25 oil futures contracts at a settle price of $55 per barrel. Each futures contract has a standard size of 1,000 barrels and an initial margin requirement of $5,500. What is the leverage factor associated with these contracts? If oil rises to $56.25 per barrel, what is the total percentage return on your futures position? What is the total percentage return on your futures position if oil falls to $54 per barrel?
- Consider the following prices, volume and open interest for gold futures contracts. Contract size: 100 oz Price units: $/oz (a) What was the value of the contract that expires in February 2022 when the market closed? (b) Which futures contracts had a higher settle price on the previous trading day? (c) Would a speculator prefer to go short at the daily high price or the daily low price?Suppose that you purchase a Treasury bond futures contract at $95 per $100 of face value. What is your obligation when you purchase this futures contract? If an FI purchases this contract, in what kind of hedge is it engaged? Assume that the Treasury bond futures price falls to 94. What is your loss or gain? Assume that the Treasury bond futures price rises to 97. Mark your position to market.An investor has agreed to LEND $10 million for 3-months in the future at a rate of (SOFR + 1%). What position should the investor take in the SOFR Futures contract to hedge against interest-rate changes? Answer in terms of LONG or SHORT position and provide a brief rationale in the response box below