D. The futures exchange replaces the failed counterparty with a solvent one E. None above 6. Suppose you enter into a long 6-month forward contract with F-$50. What is the payoff in 6 month, if the spot price jumps up to S-$807 A. $30 B. -$30 C. $50 D. $80 E. Cannot determine 7. For a 6x12 FRA contract, A uses 180-day LIBOR and expires in 6 months B. it uses 180-day LIBOR and expires in 12 months C. it uses 120-day LIBOR and expires in 6 months D. it uses 120-day LIBOR and expires in 12 months E. None above 8. Suppose that a party wanted to enter an FRA that expires in 42 days and is based on 137- day LIBOR. The dealer quotes a rate of 4.75% on the FRA . Assume that at expiration, the 137-day LIBOR is 4 % , and the notional amount is $20,000,000. What is the payoff of the FRA short position? A. -$56,227 B. $56,227 C. -$2,773,066 D. $2,773,066 E. None above Consider a hypothetical futures contract in which the current price is $82. The initial margin requirement is $5, and the maintenance margin requirement is $2. You go long 20 contracts and meet all margin calls but do not withdraw any excess margin. The settlement price and the spot price of the underlying from day 0 to day 6 look like the following: The following information applies to Question # 9- # 15: Spot Price of the Underlying 80 Settlement Price 82 Day 0 81 84 1 80 78 2 75 73 77 79 4 86 82 5 90 84 6 3