QUESTION $11$

A trader enters into $2$ short futures contracts for $5,000$ bushels of wheat per contract with futures price being $$\frac{2\mathrm{.}50}{?}$ bushel. The initial margin per contract is equal to $$2,500$ and the maintenance margin per contract is equal to $$1,500.$ The trader has $$5,000$ in his margin account just before the next settlement. How much can the futures price rise before this trader gets a margin call?

A$.2\mathrm{.}75$

B$.2\mathrm{.}70$

C$.2\mathrm{.}60$

D$.2\mathrm{.}55$

QUESTION $12$

Assume that a stock price is currently at $S=$$$40.$ It is known that in one year stock price will be either $$50$ or $$30.$ The annual interest rate is $r_f=5\%.$

Using a one$-$period risk neutral valuation method, what is the fair price of a European call option with strike price $x=45$ and $1$ year to maturity?

A$.2\mathrm{.}50$

B$.1\mathrm{.}50$

C$.2\mathrm{.}65$

D$.2\mathrm{.}86$