Use Excel and show steps please
You must type up the homework. This is an Excel homework on forward contracts, underlying asset, and the T-bill (cash). Very important: 1. You must label your x-axis and y-axis. (You must be specific about the axis! For example, it is not enough to say St as price at maturity. If the underlying is one-month futures on gold, for example, you must say ST(Gold Price in Month, or Gold Price at Maturity of 1-Month, etc.). 2. You must give a title to the graph. 3. If there are more than one line on the table, you must separate them either with color, solid versus broken line, or the style of your choice. Problem-01a (Calculation): Current crude oil price is $48.00 per barrel. You sell (short position) 5, five, crude oil futures contracts at futures price of $50.00 per barrel with maturity of one month. (The size of one future contract is 1,000 barrels) i. What is your profit if the crude oil price is $53.50 at maturity and assume cash settlement for this problem? ii. What is your profit if the crude oil price is $44.25 at maturity and assume cash settlement for this problem? Problem-01b (Excel): Using information in problem-01a: i. Graph your profit/loss (P/L) function for likely crude oil prices between $30 and $70 in increments of $2.50 at maturity. Label both axes properly! ii. Is the graph linear? If yes, what is the slope of the P/L graph. iii. Write down the function of the graph you draw. (The function must not be presented in terms of x and y!) iv. Locate problem-01a results on the graph in problem-01bi. States) Focus Problem-02a: Current S&P Index is at 3,800. Suppose you take a long (buy) position on 6, six, S&P 500 futures contracts when the futures price of the index is 3,890.00. Assume that maturity of the futures contracts is one- month. (The size of one future contract is equal to ($250)x(Index Value). i. What is your profit/loss (P/L) if S&P 500 index value is 3,935.00 at maturity? ii. What is your profit/loss (P/L) if S&P 500 index value is 3,806.00 at maturity? Problem-02b: Using information in problem 02a: i. Graph your P/L function for likely S&P 500 index numbers between 3,600.00 and 4,100.00 in increments of 20 at maturity. Label both axes properly! ii. Is the graph linear? If yes, what is the slope of the P/L graph. iii. Write down the function of the graph you draw. (The function must not be presented in terms of x and y!) iv. Locate problem-02a results on the graph in problem-02b