QUESTION 13

A futures contract on copper traded at the Chicago Mercantile Exchange has a denomination of 25,000 pounds. Today you enter into a long futures position of 10 contracts on copper at $3.23 per pound, maturing in 6 months. If copper is trading at $3.9 at maturity, what is your net profit from this position?

QUESTION 14

You expect that the stock of GoPro, currently trading at $74 per share, will be volatile in the next three months, and the price will change significantly. However, you do not know the direction of the change. Thus, you decide to enter into a long straddle position using 3 month options, buying both a put and a call contract struck at $74. The premium on both options is $2.8 per share. If at maturity, GoPro is trading at $81 per share, what is your net profit on this position?

Remember that each option contract is for 100 shares.

QUESTION 15

You own 1000 shares of MMM that you bought for $154. You also have written 10 call option contracts on MMM, at a premium of $1 and with a strike price of $157, maturing in 2 months. If at maturity of the option, the stock price is $167, what is your net profit on this position?