Using the opening and closing basis approach to finish the following blanks. Date Cash Futures 1-Oct Cash Price $6.30 May Futures $6.75 Cost of holding from Oct 1 to May 1 = $0.21 Expected Closing Basis = -$0.15 What is the expected profit margin? = 1-Oct 1-May Sell Cash @ $6.40 Sell May Futures @ Buy May Futures @ $6.45. $6.75 What is the opening basis? What is the actual closing basis? What is the gain or loss on futures market result? = What is the gain or loss on cash market result? = What is the realized price (or net selling price)? = What is the overall profit? = What is the realized price?

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
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Using the opening and closing basis approach to finish the following blanks.
Date
Cash
Futures
1-Oct
Cash Price $6.30
May Futures
$6.75
Cost of holding from Oct 1 to May 1 = $0.21
Expected Closing Basis = -$0.15
What is the expected profit margin? =
1-Oct
1-May
Sell Cash @ $6.40
Sell May Futures @
Buy May Futures @ $6.45.
$6.75
What is the opening basis?
What is the actual closing basis?
What is the gain or loss on futures market result? =
What is the gain or loss on cash market result? =
What is the realized price (or net selling price)? =
What is the overall profit? =
What is the realized price?
Transcribed Image Text:Using the opening and closing basis approach to finish the following blanks. Date Cash Futures 1-Oct Cash Price $6.30 May Futures $6.75 Cost of holding from Oct 1 to May 1 = $0.21 Expected Closing Basis = -$0.15 What is the expected profit margin? = 1-Oct 1-May Sell Cash @ $6.40 Sell May Futures @ Buy May Futures @ $6.45. $6.75 What is the opening basis? What is the actual closing basis? What is the gain or loss on futures market result? = What is the gain or loss on cash market result? = What is the realized price (or net selling price)? = What is the overall profit? = What is the realized price?
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