Q1. Refer to Table 10-4 form textbook.

a What was the settlement price on the December 2011 Eurodollar futures contract on September 1, 2010?

b How many 5-year Treasury not futures contract traded on August 31, 2010

c What is the face value on a Swiss franc currency futures contract on September 1, 2102?

d What was the settlement price on the September 2010 DJIA futures contract on August 31, 2010

Q2. You have purchased a call option on Johnson & Johnson common stock. The option has an exercise price of $57.50 and J & Js stock currently trades at $58.93. The option premium is $2.17 per contract.

a Calculate your net profit on the option if J & Js stock price rises to $62.50 and your exercise the option.

b Calculate your net profit on the option if J & Js stock price falls to $58.00 and you exercise the option.

c If J & Js stock price falls to $58.00 show that it is more profitable to exercise than not exercise the option you have purchased.