Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

3. On November 23, an investor takes a long position on five May 2021 Sugar contracts. The price at the time is 14.13 cents per

image text in transcribed
3. On November 23, an investor takes a long position on five May 2021 Sugar contracts. The price at the time is 14.13 cents per pound. Each contract is for 112,000 pounds of Sugar. What will be the gain/loss to the trader if the spot price is 14.68 cents per pound on December 30 when the contract is closed out? 4. An investor sells a Gold futures contract when the spot price is $1,880 per troy ounce on December 22". If the contract is closed out when prices began skyrocketing in carly January at the spot price of S1,945 per troy ounce January 4"), what is the investor's gain or loss on the position, per troy ounce? 5. [1 point) A trader buys three call option contracts on August Ist when the spot price on the underlying stock is $43. The strike price on the options contract is 547.50. Assume the trader exercises the option when the stock's spot price reaches S51. The price of the call option is $1.25. What is the trader's total net profit if each contract is for 100 shares? 6. [4 points] Assume an investor buys a call option contract that expires in 2 months. The call option contract has a strike price of $110. The current stock price is $102 and the call option costs $4. Create a chart of the total net profit based on the different stock prices. Then, create a graph of the total net profit to the investor. Use a stock price range of 885 to $125 in SS increments

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Finance questions

Question

Do they outperform other treatment methods?

Answered: 1 week ago

Question

The amount of work I am asked to do is reasonable.

Answered: 1 week ago

Question

The company encourages a balance between work and personal life.

Answered: 1 week ago