i. If Amla buys five June Pound futures, and the spot rate at maturity is $1.2685/Pound, what is the value of his position? ii. If Amla sells six March Pound futures, and the spot rate at maturity is $ 1.259/Pound, what is the value of his position? iii. If Amla buys eight March Pound futures, and the spot rate at maturity is $1.278/Pound, what is the value of his position?

i. If Amla buys five June Pound futures, and the spot rate at maturity is $1.2685/Pound, what is the value of his position? ii. If Amla sells six March Pound futures, and the spot rate at maturity is $ 1.259/Pound, what is the value of his position? iii. If Amla buys eight March Pound futures, and the spot rate at maturity is $1.278/Pound, what is the value of his position?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Tony Begay at Saguaro Funds. Tony Begay, a currency trader for Chicago-based Saguaro Funds, uses the following futures quotes, , on the British pound (£) to speculate on the value of the pound. a. If Tony buys 5 June pound futures, and the spot rate at maturity is $1.3982 = £1.00, what is the value of her position? b. If Tony sells 12 March pound futures, and the spot rate at maturity is $1.4558 = £1.00, what is the value of her position? c. If Tony buys 3 March pound futures, and the spot rate at maturity is $1.4558 = £1.00, what is the value of her position? d. If Tony sells 12 June pound futures, and the spot rate at maturity is $1.3982 = £1.00, what is the value of her position? a. If Tony buys 5 June pound futures, and the spot rate at maturity is $1.3982/£, what is the value of her position? The value of Tony's position is $. (Round to the nearest cent. Use a minus sign if value is negative.) b. If Tony sells 12 March pound futures, and the spot rate at maturity is $1.4558/£,…
23. Assume that a speculator purchases a put option on British pounds (with a strike price of $1.50) for $.05 per unit. A pound option represents 31,250 units. Assume that at the time of the purchase, the spot rate of the pound is $1.51 and continually rises to $1.62 by the expiration date. The highest net profit possible for the speculator based on the information above is: A) $1,562.50. B) -$1,562.50. C) -$1,250.00. D) -$625.00.
Please answer it with no descriptions or details, with the question numbers and answers, the exact way it should go on according to the red regulations, thank you!
3. Suppose you are a derivatives trader specializing in creating customized commodity for- ward contracts for clients and then hedging your position with exchange-traded futures contracts. Your latest position is an agreement to deliver 100,000 gallons of unleaded gas- oline to a client in three months. a. Explain how you can hedge your position using gasoline futures contracts. b. If the only available gasoline futures contracts call for the delivery of 42,000 gallons and mature in either two or four months, describe the nature of the basis risk involved in your hedge.
June 2021 Mexican peso futures contract has a price of $0.05197 per MXN. You believe the spot price in June will be $0.05831 per MXN. MXN500,000 is the contract size of one MXN contract. Required: What speculative position would you enter into to attempt to profit from your beliefs? Calculate your anticipated profits, assuming you take a position in three contracts. What is the size of your profit (loss) if the futures price is indeed an unbiased predictor of the future spot price and this price materializes?
Doctor Dumpkins is bullish on the British pound so he sells a one-month put for $0.03. The strike price of the call is $1.24. On the expiration day, the spot price of the British pound is $1.27. Calculate the break-even price, the option payoff at expiration, and the net profit at expiration.
Walmart has taken a yen futures position to hedge a 125 million yen account payable at a yen futures price of 0.009483 $/yen. As you know, yen futures are quoted to six decimal places, and each yen futures contract is for 12.5 million yen. How much does Walmart make or lose on their futures position in $ for each point the yen futures price increases?
9) This is an exercise about financial futures. Can you please check the picture and answer the question? Only one option is right (A, B, C, or D).
June 2021 Mexican peso futures contract has a price of $0.05194 per MXN. You believe the spot price in June will be $0.04525 per MXN. Required: a. What speculative position would you enter into to attempt to profit from your beliefs? b. Calculate your anticipated profits, assuming you take a position in three contracts. c. What is the size of your profit (loss) if the futures price is indeed an unbiased predictor of the future spot price and this price materializes? Complete this question by entering your answers in the tabs below. Required A Required B Required C Calculate your anticipated profits, assuming you take a position in three contracts. Note: Do not round intermediate calculations. Round your answer to the nearest whole number. Anticipated profit
You purchase a $100,000 bond futures contract at 96.5. a) Assume that the bond futures price falls to 94. What is your gain/loss? b) Assume that the bond futures price rises to 98. What is your gain/loss?

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