Accounting questions solution Futures are available on three-month T-bills with acontract size of $1 million. If you take a long position at96.22 and later sell the contracts at 96.87, what is the totalnet gain or loss on this transaction?

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Answered: Futures are available on three-month…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Futures are available on theee month solution general accounting
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The margin requirement on the S&P 500 futures contract is 16%, and the stock index is currently 2,100. Each contract has a multiplier of $50 a. How much margin must be put up for each contract sold? Margin b. If the futures price falls by 1% to 2,079, what will happen to the margin account of an investor who holds one contract? (Input the amount as a positive value.) Margin account by c-1. What will be the investor's percentage return based on the amount put up as margin? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.) Percentage return ed ok at rices c-2. What would be the current cash balance in the margin account? Cash balance
Assume today's settlement price on a CME EUR futures contract [with EUR 125,000 per contract] is $1.1500/EUR. You have a short position in one contract. Your performance bond account currently has a balance of $2,500. The next three days' settlement prices are $1.1450/EUR, $1.1400/EUR, and $1.1600/EUR. Calculate the changes in the performance bond account for each day (show the value each day) from daily marking-to-market and the balance of the performance bond account at the end of the third day. (fill in each box below with the dollar amount in the margin account after settlement each day, use whole dollars, no decimals, no $ symbol) Performance bond/margin-Day1 Performance bond/margin-Day2 Performance bond/margin-Day3
A one year gold futures contract is selling for $1,685. Spot gold prices are $1,610 and the one year risk free rate is 3%. The arbitrage profit per contract implied by these prices is _____________. Group of answer choices 24.75 39.77 28.92 26.70 22.60
Assume that today's settlement price on a CME EUR futures contract is $1.1145/EUR. You have a long position in one contract. Your margin balance is currently of $2,763. The next three days' settlement prices are $1.1144, $1.1141, and $1.1148. Calculate the balance in the margin account after the third day due to dailly mark-to-market. The size of a futures contract on the euro is EUR125,000. Note: Enter your answer rounded to the nearest dollar. For example, if the calculated balance on the margin account after the third day of mark-to-market is $2,475.80, enter it as: 2476 or 2,476.
Consider a hypothetical futures contract where the current price is $ 212. The initial margin requirement is $ 10 and the maintenance margin requirement is $ 8. You enter into long 20 contracts and meet all margin requirements, but do not withdraw any excess margin. B. Complete the table below and explain all deposited funds. Suppose the contract was purchased at the settlement price of that day, so there is no gain or loss at current market prices on the day of purchase. C. What is your total profit or loss by the end of Day 6?
Refer to the Mini-S&P contract in Figure 22.1. Assume the closing price for this day.a. If the margin requirement is 23% of the futures price times the contract multiplier of $50, how much must you deposit with your broker to trade the March maturity contract? (Round your answer to the nearest whole dollar.)Required margin depositb. If the March futures price increases to 2594.70, what percentage return will you earn on your investment if you entered the long side of the contract at the price shown in the figure? (Do not round intermediate calculations. Round your answer to 2 decimal places.)Percentage return on net investment%c. If the March futures price falls by 1%, what is your percentage return? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.)Percentage return on net investment%
A trader creates a SHORT STRADDLE for GBP/USD with a strike price of 1.3865. The call option premium on GBP is 0.019 USD. The put option premium is 0.024 USD. One option contract represents GBP 125,000. What is the net profit of the trader if GBP/USD = 1.3869 at expiry?
3. Suppose a financial asset, ABC, is the underlying asset for a futures contractwith settlement of 6 months from now. You know the following about this financial asset and futures contract in the cash market ABC is selling for $120; ABC pays $18 per year in two semiannual payments of $9, and the next semiannual payment is due exactly 6 months from now; and the current 6-month interest rate at which funds can be loaned or borrowed is 6%. a) What is the theoretical (or equilibrium ) futures price? b) Suppose that ABC pays an interest quarterly instead of semiannually, What would be the theoretical futures price for 3 months settlement? c) Suppose that the borrowing rate is 8% and the 6-month lending rate is 6%, What is the boundary for the theoretical futures price? SHOW YOUR SOLUTIONS, PLEASE DONT USE MS EXCEL
A trader creates a LONG STRADDLE for GBP/USD with a strike price of 1.2457. The call option premium on GBP is 0.017 USD. The put option premium is 0.022 USD. One option contract represents GBP 125,000. What is the net profit of the trader if GBP/USD = 1.2427 at expiry?

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Futures are available on three-month T-bills with a contract size of $1 million. If you take a long position at 96.22 and later sell the contracts at 96.87, what is the total net gain or loss on this transaction?