Suppose that, on 5 November 2020, you opened a short position in a two-year futures contract on the Tesla stock. The share price at the beginning of the contract was $146, and the initial futures price was equal to a theoretical two-year forward price. Assume the following: initial margin of 40% of the futures value, maintenance margin of 32% of the futures value, 3% flat interest rate, continuous compounding, no withdrawals of the excess margin. Next, suppose that, on 1 November 2022, the Tesla stock is priced at $228 per share, and it goes down by 1% daily over 2nd, 3rd and 4th November. Suppose further that, on 1 November 2022, you have received a margin call from your broker (this was your first margin call during this contract) and had to make an instant adjustment to your margin account. Calculate the value of your position in this contract at a close of each day between 1-4 November 2022. Show and explain each step of your derivations.

Assume today's settlement price on a CME EUR futures contract is $1.3154 per euro. You have a short position in one contract. EUR125,000 is the contract size of one EUR contract. Your performance bond account currently has a balance of $2,400. The next three days' settlement prices are $1.3140, $1.3147, $1.3063. Calculate the changes in the performance bond account from daily marking-to-market and the balance of the performance bond account after the third day. Required: Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Balance of the performance bond account

You are going to write a 50-strike 1 year call option priced as $16 and enter 1 year long forward contract with $50 forward price. The continuous compounded risk free interest rate is 7%. If both positions have same profit, the stock price is in year 1.(please use 4 decimal numbers)

Suppose that you, on 1st of January 2023, enter a long position in a 10-year forward contract on a non-dividend-paying stock. The stock price is $50 and the risk-free rate of interest is 5% per annum with yearly compounding (as per 1st of January 2023). a)  What are the forward price and the initial value of the forward contract?  Five years later, 1st of January 2028, the price of the stock is $60 and the risk-free interest is still 5%. b)  On 1st of January 2028, what are the forward price and the value of the forward contract that you entered into on 1st of January 2023? Explain. c)  Suppose that you on 1st of January 2028 enter a short position in a forward contract on the same underlying stock and with expiration date in 5 years. What is the value of your total position? (I.e. what is the total value of the long position in the forward contract in a) and your short position). What is the payoff of your total position at maturity?  d)  On 1st of January 2028, what is the value…

Please help and explain. Consider the Mark-to-Market Settlements for 1 gold futures contracts maturing in 5 months. Assume that the risk-free rate available to investors is 6% per annum with quarterly compounding and that no arbitrage relationship between spot and futures prices (Futures-Spot parity) with continuous compounding holds in all months. Also assume that the initial margin is $18,000 per contract, while the maintenance margin is $6000 per contract   Month Spot Price End of Month(S) Futures Price, End of Month (F) Change in Futures Price Contract Size (ounces) Buyer/Long Position Seller/Short Position   Contract Initiated 0 1307.00 1339.84 -- 100 (c)   (c) Initial Margin   1 1309.00 1335.25 (b) 100 (c)   (c) Monthly Adjustments   2 (a)   1336.76 (b) 100 (c)   (c)   3 1332.00 1345.29 (b)   100 (c)   (c)   4 1325.00 (a)     (b)   100 (c) (c) Delivery 5…

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____________

The spot price of a stock is $100 and the continuous compounding risk-free rate for all maturities is 9%. The stock pays a $5 dividend only six months later this year. What is the equilibrium price of one-year forward contract

Assume today's settlement price on a CME EUR fütures contract is $1.3176/EUR. You have a short position in one contract. Your performance bond account currently has a balance of $3,500. The next three days settlement prices are $1.3162, $1.3169, and $1.3085. Calculate the changes in the performance bond account from daily marking-to-market and the balance of the performance bond account after the third day. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Balance of the performance bond account

Consider a long forward contract on Amps Inc stock with a remaining maturity of 8 months. Amps Inc has announced that it will pay $2 dividend per share after 3 months. The risk-free rate of interest (with continuous compounding) is 5 percent per year, the current stock price is $40, and the delivery price when the contract is in place is $42. What is the current no-arbitrage forward price of this stock? 35.32 42.67 39.31 42.44 33.89 32.45

Refer to the Mini-S&P contract in Figure 22.1. Assume the closing price for this day.a. If the margin requirement is 23% of the futures price times the contract multiplier of $50, how much must you deposit with your broker to trade the March maturity contract? (Round your answer to the nearest whole dollar.)Required margin depositb. If the March futures price increases to 2594.70, what percentage return will you earn on your investment if you entered the long side of the contract at the price shown in the figure? (Do not round intermediate calculations. Round your answer to 2 decimal places.)Percentage return on net investment%c. If the March futures price falls by 1%, what is your percentage return? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.)Percentage return on net investment%