Given the following information, what would you expect to be the minimum price at which a 3 month futures contract for 100 bushels of wheat would be trading? • The spot price of wheat is $8 per bushel. Storage and insurance costs for wheat are $.50 per 100 bushels, per month, payable at the end of the storage period. You can borrow money at 8% per year. a) $865.50 b) $814.50 c) $816.50 d) $817.5

5. On June, an investor bought five (10 tons per contract) of soybean futures at $3,000 per ton. Assume the exchange set an initlal margin of 10% and a maintenance margin of 8%. If its settlement price falls to $2800 per ton, the variation margin should be ()? A. 6000 B. 6200 C. 9000 D. 10000

A one year gold futures contract is selling for $1,754. Spot gold prices are $1,600 and the one-year risk free rate is 3.4%. The arbitrage profit per contract implied by these prices is____________

Suppose that you bought two one-year gold futures contracts when the one-year futures price of gold was US$1,340.30 per troy ounce. You then closed the position at the end of the sixth trading day. The initial margin requirement is US$5,940 per contract, and the maintenance margin requirement is US$5,400 per contract. One contract is for 100 troy ounces of gold. The daily prices on the intervening trading days are shown in the following table. Day Settlement Price 0 1340.30 1 1345.50 2 1339.20 3 1330.60 4 1327.70 5 1337.70 6 1340.60   Assume that you deposit the initial margin and do not withdraw the excess on any given day. Whenever a margin call occurs on Day t, you would make a deposit to bring the balance up to meet the initial margin requirement at the start of trading on Day t+1, i.e., the next day.      c. What is your total profit after you closed out your position?