Sally decides to buy a Treasury note futures contract for delivery of $100,000 face amount in December, at a price of 110'8.5. At the same time, Scott decides to sell a Treasury note futures contract if he can get a price of 110'8.5 or higher. The exchange, in turn, agrees to sell one Treasury note contract to Sally at 110'8.5 and to buy one contract from Scott at 110'8.5. The price of the Treasury note increases to 110'26.5. Calculate Sally's balance on margin account. Assume that initial margin is $1,890. Round the answer to two decimal places. Your Answer:

Sally decides to buy a Treasury note futures contract for delivery of $100,000 face amount in December, at a price of 110'8.5. At the same time, Scott decides to sell a Treasury note futures contract if he can get a price of 110'8.5 or higher. The exchange, in turn, agrees to sell one Treasury note contract to Sally at 110'8.5 and to buy one contract from Scott at 110'8.5. The price of the Treasury note increases to 110'26.5. Calculate Sally's balance on margin account. Assume that initial margin is $1,890. Round the answer to two decimal places. Your Answer:

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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Trader A enters into a forward contract to sell gold for $1,600 an ounce in one year.Trader B buys a put option to sell gold for $1,600 an ounce in one year.The cost of the option is $150 an ounce. Show the profit per ounce as function of the price of gold in one year for the two traders.Be sure to include labels on the chart. Then answer the questions on the similarities/differences between these two positions:
A farmer sells one corn futures contract at a price of $5.84 per bushel. The spot price of corn drops to $4.65 when the contract expires and the farmer delivers her corn. If the farmer harvested 24,000 bushels of corn and had futures contracts on 20,000 bushels of corn, what is the farmer's net proceeds when corn is sold?
James sells 150 call options with a strike price of $59 and a premium of $2 per contract. If the market price equals $62 at expiration, calculate his profit/loss from this transaction.
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On January 1 2021, you will purchase a $350,000 house. To pay for the house you will pay 20% down (in Cash) and borrow the remainder under a 30 year mortgage with a contractual interest rate of 3.35% Your market rate of interest, for the risk you pose, is 4.5% Your payments are due at the end of each month with the first payment due 1/31/2021. How much interest (rounded to the nearest dollar) will you repay during the time period of 2022-2025 ((the second through fifth year of the loan))
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Laura Cervantes. Laura Cervantes is a currency speculator and she sells eight June futures contracts for 500,000 pesos at the closing price quoted here: LOADING... Maturity Open High Low Settle Change Lifetime High Lifetime Low Open Interest March 0.10953 0.10988 0.1093 0.10958 0.11 0.0977 34481 June 0.1079 0.10795 0.10778 0.10773 0.108 0.0973 3405 Sept 0.10615 0.10615 0.1061 0.10573 0.10615 0.0993 1481 . a. What is the value of her position at maturity if the ending spot rate is $0.12005/Ps? b. What is the value of her position at maturity if the ending spot rate is $0.09806/Ps? c. What is the value of her position at maturity if the ending spot rate is $0.11007/Ps?
Assume that the price of December 2021 corn futures is $4.65/bushel in February and $4.50 in October. If spot cash price in October is $4.55, what is the farmer's total revenue? Assume he entered into 20 contracts. Each corn contract is 5000 bushels.
An investor takes a long position in two gold futures contracts. Each gold futures contract is for delivery of 100 ounces of gold. The initial futures price is $1,250 per ounce. The initial margin is $6,000 per contract. The investor closes the contracts when the gold futures price is $1,226.90. If there was one margin call for $4,020, what is the balance in the margin account at the time of closing the futures contracts? a. $11,400 b. $11,800 c. $12,200 d. $12,600 e. $13,000

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