If you are short a futures contract, why do you not have to borrow the futures contract
Question:
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 53% (15 reviews)
The mechanism of shorting or shortselling works differently ...View the full answer
Answered By
Parvesh Kumar
I am an experienced Mathematics and Statistics tutor with 10 years of experience teaching students and working professionals. I love teaching students who are passionate to learn subjects or wants to understand any mathematics and statistics concept at graduation or master’s level. I have worked with thousands of students in my teaching career. I have helped students deal with difficult topics and subjects like Calculus, Algebra, Discrete Mathematics, Complex analysis, Graph theory, Hypothesis testing, Probability, Statistical Inference and more. After learning from me, students have found Mathematics and Statistics not dull but a fun subject. I can handle almost all curriculum of mathematics. I did B.Sc (mathematics), M.Sc (mathematics), M.Tech (IT) and am also Gate (CS) qualified. I have worked in various college and school and also provided online tutoring to American and Canadian students. I look forward to discussing with you and make learning a meaningful and purposeful
5.00+
4+ Reviews
10+ Question Solved
Related Book For
An Introduction to Derivative Securities Financial Markets and Risk Management
ISBN: 978-0393913071
1st edition
Authors: Robert A. Jarrow, Arkadev Chatterjee
Question Posted:
Students also viewed these Banking questions
-
What is the difference between a forward contract and a futures contract? Why do you think that futures contracts are much more common? Are there any circumstances under which you might prefer to use...
-
Consider a stock that will pay a dividend of D dollars in one year, which is when a futures contract matures. Consider the following strategy: Buy the stock, short a futures contract on the stock,...
-
1. Which of the following statements is false? a. A spot price is a price today for immediate delivery. b. If a Canadian firm has to pay U.S. dollars in the future, it worries about the potential...
-
Chiz enterprise reports its gross sales/receipts during the quarter as follows: Sale of computers Gross receipts - computer repairs Sales returns and allowances Sales discounts for early payments...
-
Explain the processes of deduction and induction, giving an example of each.
-
In early January 2011, Reymont Corporation applied for a trade name, incurring legal costs of $18,000. In January 2012, Reymont incurred $7,800 of legal fees in a successful defense of its trade...
-
The likely future direction of employment practices in the UK has attracted a great deal of attention in recent years and has led to several hotly contested debates. L01
-
International Accounting Standard No. 16 provides companies the option of valuing property, plant, and equipment at either historical cost or fair value. If fair value is selected, then the property,...
-
Which of the following is not a Miscellaneous Itemized Deduction? A: Job Hunting Expenses B: Legal fees for divorce C: Tax preparation fee D: Safe deposit box fee
-
Consider a hemispherical droplet of liquid water residing on a flat surface, as shown in the figure on page 526. Still air surrounds the droplet. At an infinitely long distance from the gas film, the...
-
When holding a futures contract long, if you do not want to take delivery of the underlying asset, what transaction must you perform? Explain.
-
Is the futures price equal to the value of the futures contract? If not, then what is the value of a forward contract when it is written? Explain.
-
Consider a conduction electron in a cubical crystal of a conducting material. Such an electron is free to move throughout the volume of the crystal but cannot escape to the outside. It is trapped in...
-
IV. Normal Distribution 9. IQ scores are said to be normally distributed with a mean of 100 and a standard deviation of 15. Label the normal curve below and then answer the questions that follow. a....
-
Manually determine the range, variance, and standard deviation of the set of numbers. Show the computations: a. 3, 8, 10, 14, 9, 10, 12, 21, 5, 13, 11, 10 b. 232, 212, 151, 325, 142, 132, 142, 236,...
-
Alex and Bess have been in partnership for many years. The partners, who share profits and losses on a 70:30 basis, respectively, wish to retire and have agreed to liquidate the business. Liquidation...
-
1 Frequency Domain Analysis 1. Given an input u(t) = cos(t) + 2 sin(5t) cos(5t) which is a sum of a lower frequency signal and a higher-frequency noise. Determine the feasible range of time constant...
-
A motor supplies a constant torque or twist of M = 120 lb ft to the drum. If the drum has a weight of 30 lb and a radius of gyration of ko = 0.8 ft, determine the speed of the 15-lb crate A after it...
-
Greene Company sold its 100% WI in a proved property for $700,000 and retained an ORI. Greenes net cost basis in the property was $450,000. The fair market value of the entire original working...
-
A fuel pump sends gasoline from a car's fuel tank to the engine at a rate of 5.88 10-2 kg/s. The density of the gasoline is 735 kg/m3, and the radius of the fuel line is 3.18 10-3 m. What is the...
-
When a team decision requires a high degree of commitment for its implementation, a(n) ____________ decision is generally preferred. (a) authority (b) majority-vote (c) consensus (d) railroading
-
Why is regulatory forbearance a dangerous strategy for a deposit insurance agency?
-
The FIRREA legislation of 1989 is the most comprehensive banking legislation since the 1930s. Describe its major features.
-
What steps were taken in the FDICIA of 1991 to improve the functioning of federal deposit insurance?
-
What is the yield to maturity on a 10-year, 9% annual coupon, $1,000 par value bond that sells for $967.00? That sells for $1,206.10?
-
1)Prepare the journal entry to record Tamas Companys issuance of 6,500 shares of $100 par value, 9% cumulative preferred stock for $105 cash per share. 2. Assuming the facts in part 1, if Tamas...
-
On consolidated financial statements, where does the parents equity in the net income of the subsidiary account appear? A. On the consolidated income statement, as a revenue B. On the consolidated...
Study smarter with the SolutionInn App