Please answer the questions below:

It is April 15, and a trader enters into a short position in two soybean meal futures contracts. The contracts expire on August 15, and call for the delivery of 100 tons of soybean meal each. Further, because this is a futures position, it requires the posting of a $3,000 initial margin and a $1,500 maintenance margin per contract. For simplicity, however, assume that the account is marked to market on a monthly basis. Assume the following represent the contract delivery prices (in dollars per ton) that prevail on each settlement date: April 15 (initiation) 173.00 May 15 179.75 June 15 189.00 July 15 182.50 August 15 (delivery) 174.25

Assume that the risk-free interest rate is 0.

1. What is the balance in the margin account on the May 15 settlement date, including any additional amount that is required to meet a margin call?

A) $4,650.

B) $1,350.

C) $2,300.

D) $3,000.

2. HAW, Inc. plans to pay a $1.10 dividend per share in 3 months and a $1.15 dividend in 6 months. HAW's share price today is $45.60 and the continuously compounded quarterly interest rate is 2.1%. What is the price of a forward contract, which expires immediately after the second dividend?

A) $45.28

B) $45.96

C) $45.60

D) $46.24

3. The annualized dividend yield on the S&P 500 Index is 1.40%. The continuously compounded interest rate is 6.4%. If the 9-month forward price is $925.28 and the index is priced at $950.46, what is the profit/loss from a cash-and-carry strategy?

A) $25.18 loss

B) $25.18 gain

C) $61.50 loss

D) $61.50 gain

4. Consider an investment in five S&P 500 Index futures contracts at a price of $924.80. The initial margin requirement is 15.0% and the maintenance margin is 10.0% (of the initial price level). If the continuously compounded interest rate is 5.0%, what will the futures price need to be for a margin call to occur 10 days from now? Assume no settlement within the 10 days.

A) $882.64

B) $878.36

C) $898.63

D) $905.25