futures price is $820 per ounce. How many contracts do you need to purchase? How much will you pay for your platinum? What is your dollar profit if platinum sells for $870 a troy ounce when the futures contract expires? What if the price is $770 at expiration?

Q: A one year gold futures contract is selling for $1,685. Spot gold prices are $1,610 and the one year…

A: fair value of futures = Spot rate * (1+risk free rate )^n

Q: Suppose that the 3-month futures price of corn is £2.00 (£2 per bushel). The cost-of - carry for…

A: Here given that the 3 month future price of corn is £ 2. Also given the cost of carry for this…

Q: settlement prices are $1.1126, $1.1133, and $1.1050. Calculate the balance of the performance bond…

A: A future contract is similar to an agreement to purchase or sell an item at a specific price at a…

Q: A farmer sells futures contracts at a price of $6.70 per bushel on 10,000 bushels of corn. The spot…

A: The futures contract refers to the derivative contracts in which two parties of the contract agree…

Q: The futures price for an asset is $60. Expiration is in 3 months, and the risk free rate is 4%. If…

A: Arbitrage is the practice of simultaneously buying and selling an asset in different markets to take…

Q: The spot price of gold today is $1, 507 per troy ounce, and the futures price for a contract…

A: The cost of carry represents the expenses associated with holding an asset from one period to…

Q: An investor has agreed to LEND $10 million for 3-months in the future at a rate of (SOFR + 1%). What…

A: Data given:  Investor agreed to LEND $10 million for 3-months in the future at a rate of (SOFR + 1%)…

Q: You have a large interest payment to make three months from now, and you hedge it by selling a…

A: The interest rate future contract gives an owner the right to receive or an obligation to pay the…

Q: You have decided to purchase 25 oil futures contracts at a settle price of $55 per barrel. Each…

A: 1) Computation of Leverage Factor : Given data,                            Buy price = $55 per…

Q: Suppose that the 3-month futures price of corn is £2.00 (£2 per bushel). The cost-of-carry for this…

A: Here given that the 3 month future price of corn is £ 2. Also given the cost of carry for this…

Q: What is the present value of a security that will pay $10,000 in 5 years if securities of equal risk…

A: Present value (PV) is a financial concept used to determine the current worth or value of a sum of…

Q: You have issued a loan to a wealthy friend and you are expecting a large interest payment to be made…

A: It is a future contract of an underlying asset that pays interest. It allows the buyer and seller to…

Q: Suppose that you purchase a Treasury bond futures contract at $95 per $100 of face value.  What is…

A: The obligation is to buy the bond @$95 at a specified future date

Q: 1-year futures price of gold is Rs. 500/g. What should be the 2 year futures price of gold assuming…

A: 1-year futures price = $500 /gAnnual interest rate = 10%Case 1: 2-year futures price = $560 /gCase…

Q: What is the present value of a security that will pay $18,000 in 20 years if securities of equal…

A: The objective of this question is to calculate the present value of a security that will pay $18,000…

Q: Assume today's settlement price on a CME EUR futures contract (with EUR 125,000 per contract] is…

A: In daily marking to market method, the account balance is altered each day based on the gain or loss…

Q: What is the present value of a security that will pay $13,000 in 20 years if securities of equal…

A: Present Value refers to a concept that states the discounted value or say value at today's time of…

Q: (mark-to-market) You enter a short position in a € future contract with the size of €125,000 today.…

A: Future contracts are contracts done today but settled on the date and rate specified in the contract…

Q: Suppose the S&P 500 index futures price is currently 950 and the initial margin is 10%. You wish to…

A: Compounding could be a budgetary concept where profit from an investment generate extra profit over…

Q: Assume today's settlement price on a CME EUR futures contract is $1.3154 per euro. You have a short…

A: In a futures contract, the buyer and the seller agree to buy or sell a defined amount of an…

Q: Your company needs £500,000 per month. You choose to hedge half of the required amount by entering…

A: Futures are standardized contracts. They are used to buy or sell underlying asset at the…

Q: What is the current minimum possible value of an American put whose exercise price is 27 if the…

A: A put option is a financial contract that gives the holder the right, but not the obligation, to…

Q: What is the present value of a security that will pay $6,000 in 20 years if securities of equal risk…

A: Present value (PV) is the current value of a future sum of money or stream of cash flows given a…

Q: January 1, you sold one February maturity S&P 500 Index futures contract at a futures price of…

A: The future contract is a type of standardized type of Contract ,these type of traded on the security…

Q: If the spot price for silver is $18.56 per ounce, what should the futures contract price be for a…

A: A derivative is a financial instrument that derived its value from an underlying asset such as…

Q: Suppose you sell seven March 2021 silver futures contracts on December 4, 2020, at the last price of…

A: Short position refers to the situation where an investor sell the contract without having the asset…

Q: What is the present value of a security that will pay $18,000 in 20 years if securities of equal…

A: Present value is the value of the money in current time that is expected to be received in future…

Q: r to the Mini-S&P contract in Figure 22.1. Assume the closing price for this day. a. If the margin…

A: When you trade in index futures than you do not have to put all money but only very small margin…

Q: Suppose that your company is planning to sell 1.25 million litres of fuel in two years. The current…

A: A futures contract is a contract where the holder will be given the right to buy or sell the asset…