Question
3. A. You buy seven copper futures at $2.79 per pound, where the contract size is 25,000 pounds. At contract maturity, copper is selling for
3. A. You buy seven copper futures at $2.79 per pound, where the contract size is 25,000 pounds. At contract maturity, copper is selling for $2.72 per pound. What is your profit or (loss) on the transaction?
B. You sell two aluminum futures at $2,332 per metric ton, where the contract size is 25 metric tons. At contract maturity, aluminum is selling for $2,315 per metric ton. What is your profit or (loss) on the transaction?
C. You buy 200 call option contracts on corn with a strike price of $3.60 per bushel at a quoted price of $0.07 per bushel, where the contract size is 5,000 bushels. At option expiration, corn sells for $3.65 per bushel. What is your net profit or (loss) on the transaction?
D. You buy 30 put option contracts on lean hogs with a strike price of $0.66 per pound at a quoted price of $0.05 per pound, where the contract size is 40,000 pounds. At option expiration, lean hogs sell for $0.59 per pound. What is your net profit or (loss) on the transaction?
E. You buy 30 put option contracts on lean hogs with a strike price of $0.05 per pound, where the contract size is 40,000 pounds. At option expiration, lean hogs sell for $0.68 per pound. What is your net profit or (loss) on the transaction?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
A To calculate the profit or loss on a futures contract you need to multiply the difference between the market price and the contract price by the con...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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