Question
Please provide me the formula, workings and explain how did u get the answer. Thanks! 1. Yesterday, you entered into a futures contract to buy
Please provide me the formula, workings and explain how did u get the answer. Thanks!
1. Yesterday, you entered into a futures contract to buy 62,500 at $1.50 per . Your initial performance bond is $1,500 and your maintenance level is $500. Below what settle price will you for the first time get a demand for additional funds to be posted?Show all your calculations
A. $1.5160 per .
B. $1.208 per .
C. $1.1920 per .
D. $1.4840 per .
2. Yesterday, you entered into a futures contract to buy 62,500 at $1.50/. Your initial margin was $3,750 (= 0.04 62,500 $1.50/ = 4 percent of the contract value in dollars). Your maintenance margin is $2,000. Below what settle price (use 4 decimal places) will you for the first time get a margin call?Show all your calculations.
A. $1.4720/
B. $1.5280/
C. $1.500/
D. None of the above
3. Today's settlement price on a Chicago Mercantile Exchange (CME) Yen futures contract is $0.8011/100. Your margin account currently has a balance of $2,000. The next three days' settlement prices are $0.8057/100, $0.7996/100, and $0.7985/100. (The contractual size of one CME Yen contract is 12,500,000). If you have a short position in one futures contract, the changes in the margin account from daily marking-to-market will result in the balance of the margin account after the third day to be? Show all your calculations.
A. $1,425.
B. $2,000.
C. $2,325.
D. $3,425.
4. Suppose you observe the following 1-year interest rates, spot exchange rates and futures prices. Futures contracts are available on 10,000. How much risk-free arbitrage profit could you make on 1 contract at maturity from this mispricing? Show all your calculations.
A. $159.22
B. $153.10
C. $439.42
D. None of the above
5. The current spot exchange rate is $1.55 = 1.00 and the three-month forward rate is $1.60 = 1.00. Consider a three-month American call option on 62,500 with a strike price of $1.50 = 1.00. Immediate exercise of this option will generate a profit of
A. $6,125.
B. $6,125/(1 + i$)3/12.
C. negative profit, so exercise would not occur.
D. $3,125.
6The current spot exchange rate is $1.55 = 1.00 and the three-month forward rate is $1.60 = 1.00. Consider a three-month American call option on 62,500. For this option to be considered at-the-money, the strike price must be
Question 27 options:
1) $1.60 = 1.00
2) $1.55 = 1.00
3) $1.55 (1+i$)3/12 = 1.00 (1+i)3/12
4) none of the above
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