Day Beginning Balance Funds Deposited Settlement Price Futures Price Change Gain/ Loss Ending Balance 0 82.00 1 84.00 2 78.00 3 73.00 4 79.00 5 82.00 6 84.00 1) What is the total initial margin? 2) What is the total maintenance margin? 3) What is the dollar gain or loss on the total 20 contracts? 4) What is the investor's percentage gain or loss? 5) At what price change (from the initial price) would a margin call be made? I need help with the following questions. They are also provided on the attachment.

What adjustments to the contract terms of CBOE options would be made in the following situations? If one contract is 100 shares, how many shares are included in the option contract after the following, AND, what is the new exercise price? If the shares and/or price do not change, indicate that in your answer.

1a	An option has an exercise price of $57. The company declares a 15% stock dividend.
1b	An option has an exercise price of $35. The company declares a 2 for 1 stock split.
1c	An option has an exercise price of $95. The company declares a 5 for 4 stock split.
1d	An option has an exercise price of $45. The company declares a 0.75 cash dividend.
2	Explain how the CBOE's order book official (OBO) handles public limit orders.
3	Explain the major difference between the regulation of exchange-traded options and over-the-counter options.

Question 2

Current futures price is $82 (when contract opened)
Intial margin requirement is $5
Maintenance margin is $3
You go long on 20 contracts
It is assumed that all margin calls are met and no excess funds are removed

Day Beginning Balance Funds Deposited Settlement Price Futures Price Change Gain/ Loss Ending Balance 0 82.00 1 84.00 2 78.00 3 73.00 4 79.00 5 82.00 6 84.00

1) What is the total initial margin? 2) What is the total maintenance margin? 3) What is the dollar gain or loss on the total 20 contracts? 4) What is the investor's percentage gain or loss? 5) At what price change (from the initial price) would a margin call be made?

Unit 1 Homework, Submit to DropBox by the unit deadline There are problems on 2 sheets (3 problems on this sheet and one more on the next sheet) For calculation problems, I need to be able to see your work. Please use the indicated boxes for your answers. Points 1 What adjustments to the contract terms of CBOE options would be made in the following situations? If one contract is 100 shares, how many shares are included in the option contract after the following, AND, what is the new exercise price? If the shares and/or price do not change, indicate that in your answer. 2 1a An option has an exercise price of $57. The company declares a 15% stock dividend. 2 1b An option has an exercise price of $35. The company declares a 2 for 1 stock split. 2 1c An option has an exercise price of $95. The company declares a 5 for 4 stock split. 2 1d An option has an exercise price of $45. The company declares a 0.75 cash dividend. 2 2 Explain how the CBOE's order book official (OBO) handles public limit orders. 5 3 Explain the major difference between the regulation of exchange-traded options and over-the-counter options. e on the next sheet) New # Shares New Exercise Price Fill in the grid below, determining if and when funds need to be added to the margin account. Answer the 4 questions following the grid. Current futures price is $82 (when contract opened) Intial margin requirement is $5 Maintenance margin is $3 You go long on 20 contracts It is assumed that all margin calls are met and no excess funds are removed Day 0 1 2 3 4 5 6 Beginning Balance Funds Deposited Settlement Price Futures Price Change Gain/ Loss 82.00 84.00 78.00 73.00 79.00 82.00 84.00 1) 2) 3) 4) What is the total initial margin? What is the total maintenance margin? What is the dollar gain or loss on the total 20 contracts? What is the investor's percentage gain or loss? 5) At what price change (from the initial price) would a margin call be made? Ending Balance Total possible points = 10 Unit 1 Homework, Submit to DropBox by the unit deadline There are problems on 2 sheets (3 problems on this sheet and one more on the next sheet) For calculation problems, I need to be able to see your work. Please use the indicated boxes for your answers. Points 1 What adjustments to the contract terms of CBOE options would be made in the following situations? If one contract is 100 shares, how many shares are included in the option contract after the following, AND, what is the new exercise price? If the shares and/or price do not change, indicate that in your answer. 2 1a An option has an exercise price of $57. The company declares a 15% stock dividend. 2 1b An option has an exercise price of $35. The company declares a 2 for 1 stock split. 2 1c An option has an exercise price of $95. The company declares a 5 for 4 stock split. 2 1d An option has an exercise price of $45. The company declares a 0.75 cash dividend. 2 5 2 Explain how the CBOE's order book official (OBO) handles public limit orders. OBO is an employee of CBOE and cannot trade.He/she is mandated to list all unfilled limit orders in a bo 3 Explain the major difference between the regulation of exchange-traded options and over-the-counter options. Exchange traded options are more regulated than OTC traded options. Exchange traded options are s e on the next sheet) New # Shares New Exercise Price 115 49.5652173913 100 $ 17.50 it will be 2 contracts each with 100 shares 125 no change 76 no change nfilled limit orders in a book for other traders to see, public orders listed in this book are given preference to trade before member's firm o hange traded options are standardized while OTC traded options are customized. Exchange traded options are more transparent than O ade before member's firm or market marker's order can be allowed to trade. re more transparent than OTC traded options. Exchange traded option have less default risk as the exchange clearing house guarantee to p clearing house guarantee to pay the winning party incase the losing party fails to pay unlike in OTC market. Fill in the grid below, determining if and when funds need to be added to the margin account. Answer the 4 questions following the grid. Current futures price is $82 (when contract opened) Intial margin requirement is $5 Maintenance margin is $3 You go long on 20 contracts It is assumed that all margin calls are met and no excess funds are removed Day Beginning Balance Funds Deposited 0 1 2 3 4 5 6 820 820 860 740 640 760 820 820 0 Settlement Price 82.00 84.00 78.00 73.00 79.00 82.00 84.00 Futures Price Change 0 2.00 (6.00) (5.00) 6.00 3.00 2.00 Gain/ Loss Ending Balance 0 40 -120 -100 120 60 40 820 860 740 640 760 820 860 1) 2) 3) 4) What is the total initial margin? What is the total maintenance margin? What is the dollar gain or loss on the total 20 contracts? What is the investor's percentage gain or loss? 5) At what price change (from the initial price) would a margin call be made? 1) 2) 3) 4) 5) Beginning Balance Funds Deposited 0 1 2 3 4 5 6 100 100 140 80 60 180 240 100 0 60 80 Settlement Price 82.00 84.00 78.00 73.00 79.00 82.00 84.00 Futures Price Change 0 2.00 (6.00) (5.00) 6.00 3.00 2.00 $ 23.43 1171.429 1171.428571 0.3 assumptions initial margin =50% not 5$ maintainance margin =30% not 3$ Day 860 0 40 4.88% Gain/ Loss Ending Balance 0 40 -120 -100 120 60 40 100 140 80 60 180 240 280 What is the total initial margin? What is the total maintenance margin? What is the dollar gain or loss on the total 20 contracts? What is the investor's percentage gainprice) or loss? At what price change (from the initial would a margin call be made? 100 140 40 40.00% $ 3.84 5.189873 assumptions 1 contract will cost $5 maintainance margin is $3 per contract Total possible points = 10 Unit 1 Homework, Submit to DropBox by the unit deadline There are problems on 2 sheets (3 problems on this sheet and one more on the next sheet) For calculation problems, I need to be able to see your work. Please use the indicated boxes for your answers. Points 1 What adjustments to the contract terms of CBOE options would be made in the following situations? If one contract is 100 shares, how many shares are included in the option contract after the following, AND, what is the new exercise price? If the shares and/or price do not change, indicate that in your answer. 2 1a An option has an exercise price of $57. The company declares a 15% stock dividend. 2 1b An option has an exercise price of $35. The company declares a 2 for 1 stock split. 2 1c An option has an exercise price of $95. The company declares a 5 for 4 stock split. 2 1d An option has an exercise price of $45. The company declares a 0.75 cash dividend. 2 5 2 Explain how the CBOE's order book official (OBO) handles public limit orders. OBO is an employee of CBOE and cannot trade.He/she is mandated to list all unfilled limit orders in a bo 3 Explain the major difference between the regulation of exchange-traded options and over-the-counter options. Exchange traded options are more regulated than OTC traded options. Exchange traded options are s e on the next sheet) New # Shares New Exercise Price 115 49.5652173913 100 $ 17.50 it will be 2 contracts each with 100 shares 125 no change 76 no change nfilled limit orders in a book for other traders to see, public orders listed in this book are given preference to trade before member's firm o hange traded options are standardized while OTC traded options are customized. Exchange traded options are more transparent than O ade before member's firm or market marker's order can be allowed to trade. re more transparent than OTC traded options. Exchange traded option have less default risk as the exchange clearing house guarantee to p clearing house guarantee to pay the winning party incase the losing party fails to pay unlike in OTC market. Fill in the grid below, determining if and when funds need to be added to the margin account. Answer the 4 questions following the grid. Current futures price is $82 (when contract opened) Intial margin requirement is $5 Maintenance margin is $3 You go long on 20 contracts It is assumed that all margin calls are met and no excess funds are removed Day Beginning Balance Funds Deposited 0 1 2 3 4 5 6 820 820 860 740 640 760 820 820 0 Settlement Price 82.00 84.00 78.00 73.00 79.00 82.00 84.00 Futures Price Change 0 2.00 (6.00) (5.00) 6.00 3.00 2.00 Gain/ Loss Ending Balance 0 40 -120 -100 120 60 40 820 860 740 640 760 820 860 1) 2) 3) 4) What is the total initial margin? What is the total maintenance margin? What is the dollar gain or loss on the total 20 contracts? What is the investor's percentage gain or loss? 5) At what price change (from the initial price) would a margin call be made? 1) 2) 3) 4) 5) Beginning Balance Funds Deposited 0 1 2 3 4 5 6 100 100 140 80 60 180 240 100 0 60 80 Settlement Price 82.00 84.00 78.00 73.00 79.00 82.00 84.00 Futures Price Change 0 2.00 (6.00) (5.00) 6.00 3.00 2.00 $ 23.43 1171.429 1171.428571 0.3 assumptions initial margin =50% not 5$ maintainance margin =30% not 3$ Day 860 0 40 4.88% Gain/ Loss Ending Balance 0 40 -120 -100 120 60 40 100 140 80 60 180 240 280 What is the total initial margin? What is the total maintenance margin? What is the dollar gain or loss on the total 20 contracts? What is the investor's percentage gainprice) or loss? At what price change (from the initial would a margin call be made? 100 140 40 40.00% $ 3.84 5.189873 assumptions 1 contract will cost $5 maintainance margin is $3 per contract Total possible points = 10