Homework Week 2

Suppose the current price for coffee for delivery in December is $1.3890 per pound. Each contract is for 37,500 pounds. Initial margin is $5000 and maintenance margin is 2700 on what day will long side get a margin call if over the next 5 days the futures price evolves as follows   Day       Futures Price 1.             $1.4110 2.            $1.4290 3.            $1.3800 4.            $1.3165 5.            $1.3175

Suppose the initial margin on heating oil futures is solve this question Accounting question

On Monday morning you sell one June T-bond futures contract at $97,843.75. The contract's face value is $100,000. The initial margin requirement is $2,700, and the maintenance margin requirement is $2,000 per contract. Use the following price data to calculate your cumulative rate of return on your investment at the close of day on Tuesday.    Day   Settle   Monday $ 97,406.25   Tuesday $ 98,000.00   Wednesday $ 100,000.00       16.2%     −5.8%     −0.16%     −2.2%     10%

On Monday morning you sell one June T-bond futures contract at $97,843.75. The contract's face value is $100,000. The initial margin requirement is $2,700, and the maintenance margin requirement is $2,000 per contract. Use the following price data to answer the following questions.      Day   Settle   Monday $ 97,406.25   Tuesday $ 98,000.00   Wednesday $ 100,000.00       After Monday's close the balance on your margin account will be ________.

QUESTION 35 Show all work to receive credit You entered into a short CME futures contract on 125,000 euros at the day's opening price of $1.10 per euro. Your initial margin was 6,500 and your maintenance margin is $4,000. a. The settlement price one day after you open your position is $1.09 per euro. Calculate the balance on your margin account on this day. b. The settlement price two days after you open your position is $1.11 per euro. Calculate the balance on your margin account on this day. C. At what settle price do you get a margin call? For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). B U S Paragraph Arial 14px A

2. Today is 04/30/20xx. You have a unit of commodity to sell in a month, and you would like to lock the price at $100 by hedging with futures. Since you are not selling a professionally traded commodity, you take a modified version of futures contract which is marked to the market every week as opposed to every day. The margin account yields 5.2% per annum compounded weekly, with a margin requirement (opening balance) of $40 and maintenance margin (minimum balance) of $20. The futures price of the commodity you are selling is $110 on 05/01, $104 on 05/08, $98 on 05/15, $94 on 05/22, $102 on 05/29. Assume you enter the contract today and will make the delivery on 05/30, using the 05/29 price. Assume one year consists of 52 weeks. (a) (30 pt) Fill out the cash flow table below, showing all the calculation details for (1) - (15). Profit is the money you receive, so a cash outflow is negative profit. Date Futures Price Profit Interest Balalce 04/30 $100 0 0 $40 05/01 $110 (1) (2) (3) 05/08…

Problem 3: The spot price for smoked salmon is $5,000 per ton and its six-month futures price is $4,800. The monthly interest rate is .0025 (.25%). 1. What is the average monthly net convenience yield on smoked salmon for the next six months? 2. If you are a manager of Bread&Circus and need 10 tons of smoked salmon in six months. How can you avoid the risk in the price of smoked salmon over the next six months using futures? 3. Suppose that your net convenience yield for smoked salmon is 1.2%. How does this change your hedging strateg

A trader sells two July futures contracts on frozen orange juice. Each contract is for the delivery of 20,000 pounds. The current futures price is 150 cents per pound, the initial margin is $5,000 per contract, and the maintenance margin is $3,000 per contract. What price change would lead to a margin call? Under what circumstances could $8,000 be withdrawn from the margin account?

A trader buys two July futures contracts on frozen orange juice concentrate. Each contract is for the delivery of 15,000 pounds. The current futures price is 160 cents per pound, the initial margin is $6,000 per contract, and the maintenance margin is $4,500 per contract. What price change would lead to a margin call? Under what circumstances could $2,000 be withdrawn from the margin account?

You long a futures contract for 500 units of silver for $60 per unit. The initial margin is $3,000 and the maintenance margin is $2,000. What is the silver price at which you will receive a margin call? A.$62 B.$56 C.$58 D.$64

Finance   A 10 Year Treasury Note Futures contract is purchased at a price of 103 per contract. The initial margin requirement is $3,100 per contract and the maintenance margin requirement is $2.600 per contract. $10,000 is deposited in the account. The futures price changes to 99 and 20/32 per contract. The trading fees are 2.50 per contract. The futures contract is not sold. What is the margin excess or call after the change in price? Answer Choices: A.) $5,750 Margin Call B.) $4,028 Margin Excess C.) $7,400 Margin Excess

You have taken a short position in a futures contract on corn at $2.60 per bushel. Over the next 5 days the contract settled at 2.52, 2.57, 2.62, 2.68, and 2.70. You then decide to reverse your position in the futures market on the fifth day at close. What is the net amount you receive at the end of 5 days?   A.  $0.00   B.  $2.60   C.  $2.70   D.  $2.80   E.  Must know the number of contracts

When opening a new position on futures contract, a broker requires initial margin of 15% (of the initial contract size). The broker requires an investor to replenish his margin account when the balance falls below the maintenance margin of 10% (of initial contract size). What is the margin account balance of short trader at t=3? Futures prices each day are given below. They opened 10 contracts, and contract size is 100 bushels. t-0 (initial trade) t-1 t-2 t=3 a) $150 Ob) $240 Oc) $120 d) $60 Futures Price (per bushel) $0.4 $0.45 $0.35 $0.36 Long Position Margin Short Position Margin ???

Financial accounting question

On Monday morning you sell one June T-bond futures contract at $97,843.75. The contract's face value is $100,000. The initial margin requirement is $2,700, and the maintenance margin requirement is $2,000 per contract. Use the following price data to answer the following questions. DaySettleMonday$ 97,406.25Tuesday$ 98,000.00Wednesday$ 100,000.00   The cumulative rate of return on your investment after Wednesday is a __________.   Multiple Choice   79.86% loss   2.63% loss   33.00% gain   53.95% loss

Q1 A short forward contract on a commodity that was negotiated some time ago will expire in 8 months and has a delivery price of $44. The current spot price of the commodity is $52. The risk-free interest rate (with continuous compounding) is 0.06. What is the value of the short forward contract?   Q2 Alrajhi Bank plans to pay a dividend of 3 per share both 3 and 5 from today. Alrajhi share price today is 78 SAR and the continuously compounded interest rate is 0.07. What is the price of a 9-month forward contract? Q3 An investor shorts 122 shares when the share price is $94 and closes out the position 4 months later when the share price is $98. The shares pay a dividend of $6 per share during the 4 months. How much does the investor gain or lose?

size is You decided to speculate in the market and sold six platinum futures contracts when the futures price was $1,391.20 per troy ounce. The price on the contract maturity date was $1,395. The 50 troy ounces. What was your total profit or loss on the settlement day position in the spot market? You sold for less than the eventual market 1391.2)*6 contracts * 50 oz = 1140 loss contract had to cover if you your so you lost money. price, (1395-