Question
Intro Platinum currently trades at $1,350 per troy ounce. The contract size for platinum futures is 50 troy ounces and the contract calls for physical
Intro
Platinum currently trades at $1,350 per troy ounce. The contract size for platinum futures is 50 troy ounces and the contract calls for physical settlement.
The yield on T-Bills is 0.017 (EAR).
Attempt 1/10 for 10 pts.
Part 1
What should be the futures price for an ounce of platinum to be delivered in 6 months?
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Attempt 1/5 for 10 pts.
Part 2
The actual futures price for platinum to be delivered in 6 months is $1,356.43. Is there an arbitrage opportunity? If so, should you go long or short the futures?
We should go short the futures
We should go long the futures
No arbitrage opportunity
Submit
Attempt 1/10 for 10 pts.
Part 3
You decide to trade 1 futures contracts. To make this a riskless arbitrage transaction, how many ounces of platinum should you trade? Enter a positive number to buy platinum, and a negative number to short-sell platinum.
Submit
Attempt 1/10 for 10 pts.
Part 4
If there are no margin requirements, what will be your profit per ounce in 6 months (in $)?
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