The profit ascertained by the investor in the futures contract having maturity in the month of February Introduction: Profit refers to the act of sale of a stock or security so as to ascertain gain after the stock price has moved up from the price at which it was actually acquired by the investor. Profit taking action can impact the broad market, specific sector and even an individual stock.

Question

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Answer 1

Question

Chapter 17, Problem 1PS

Summary Introduction

To calculate:

The profit ascertained by the investor in the futures contract having maturity in the month of February

Introduction:

Profit refers to the act of sale of a stock or security so as to ascertain gain after the stock price has moved up from the price at which it was actually acquired by the investor. Profit taking action can impact the broad market, specific sector and even an individual stock.

Expert Solution & Answer

Explanation of Solution

In this situation, a future contract with February maturity is being sold on January 01 at a future price amounting to $2,400. If the price of the future at the time of maturity stands to be $2,450. The contract multiplier stands to be $50. Therefore computation of the profit is shown below:

Profit=−Future price+Future contract price×Contract multiplier=−2450+2400×$50=−2500

Conclusion

Hence, it can be concluded that the profit accounts for $2,500

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4. On August 20, Mr. and Mrs. Cleaver decided to buy a property from Mr. and Mrs. Ward for $105,000. On August 30, Mr. and Mrs. Cleaver obtained a loan commitment from OKAY National Bank for an $84,000 conventional loan at 5 percent for 30 years. The lender informs Mr. and Mrs. Cleaver that a $2,100 loan origination fee will be required to obtain the loan. The loan closing is to take place September 22. In addition, escrow accounts will be required for all prorated property taxes and hazard insurance; however, no mortgage insurance is necessary. The buyer will also pay a full year's premium for hazard insurance to Rock of Gibraltar Insurance Company. A breakdown of expected settlement costs, provided by OKAY National Bank when Mr. and Mrs. Cleaver inspect the uniform settlement statement as required under RESPA on September 21, is as follows: I. Transactions between buyer-borrower and third parties: a. Recording fees--mortgage b. Real estate transfer tax c. Recording fees/document…

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Answer 2

Question

Chapter 17, Problem 1PS

Summary Introduction

To calculate:

The profit ascertained by the investor in the futures contract having maturity in the month of February

Introduction:

Profit refers to the act of sale of a stock or security so as to ascertain gain after the stock price has moved up from the price at which it was actually acquired by the investor. Profit taking action can impact the broad market, specific sector and even an individual stock.

Expert Solution & Answer

Explanation of Solution

In this situation, a future contract with February maturity is being sold on January 01 at a future price amounting to $2,400. If the price of the future at the time of maturity stands to be $2,450. The contract multiplier stands to be $50. Therefore computation of the profit is shown below:

Profit=−Future price+Future contract price×Contract multiplier=−2450+2400×$50=−2500

Conclusion

Hence, it can be concluded that the profit accounts for $2,500

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Answer 3

Question

Chapter 17, Problem 1PS

Summary Introduction

To calculate:

The profit ascertained by the investor in the futures contract having maturity in the month of February

Introduction:

Profit refers to the act of sale of a stock or security so as to ascertain gain after the stock price has moved up from the price at which it was actually acquired by the investor. Profit taking action can impact the broad market, specific sector and even an individual stock.

Expert Solution & Answer

Explanation of Solution

In this situation, a future contract with February maturity is being sold on January 01 at a future price amounting to $2,400. If the price of the future at the time of maturity stands to be $2,450. The contract multiplier stands to be $50. Therefore computation of the profit is shown below:

Profit=−Future price+Future contract price×Contract multiplier=−2450+2400×$50=−2500

Conclusion

Hence, it can be concluded that the profit accounts for $2,500

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 17, Problem 1PS

Summary Introduction

To calculate:

The profit ascertained by the investor in the futures contract having maturity in the month of February

Introduction:

Profit refers to the act of sale of a stock or security so as to ascertain gain after the stock price has moved up from the price at which it was actually acquired by the investor. Profit taking action can impact the broad market, specific sector and even an individual stock.

Expert Solution & Answer

Explanation of Solution

In this situation, a future contract with February maturity is being sold on January 01 at a future price amounting to $2,400. If the price of the future at the time of maturity stands to be $2,450. The contract multiplier stands to be $50. Therefore computation of the profit is shown below:

Profit=−Future price+Future contract price×Contract multiplier=−2450+2400×$50=−2500

Conclusion

Hence, it can be concluded that the profit accounts for $2,500

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 17, Problem 1PS

Summary Introduction

To calculate:

The profit ascertained by the investor in the futures contract having maturity in the month of February

Introduction:

Profit refers to the act of sale of a stock or security so as to ascertain gain after the stock price has moved up from the price at which it was actually acquired by the investor. Profit taking action can impact the broad market, specific sector and even an individual stock.

Expert Solution & Answer

Explanation of Solution

In this situation, a future contract with February maturity is being sold on January 01 at a future price amounting to $2,400. If the price of the future at the time of maturity stands to be $2,450. The contract multiplier stands to be $50. Therefore computation of the profit is shown below:

Profit=−Future price+Future contract price×Contract multiplier=−2450+2400×$50=−2500

Conclusion

Hence, it can be concluded that the profit accounts for $2,500

Answer 6

Chapter 17, Problem 1PS

Summary Introduction

To calculate:

The profit ascertained by the investor in the futures contract having maturity in the month of February

Introduction:

Profit refers to the act of sale of a stock or security so as to ascertain gain after the stock price has moved up from the price at which it was actually acquired by the investor. Profit taking action can impact the broad market, specific sector and even an individual stock.

Expert Solution & Answer

Explanation of Solution

In this situation, a future contract with February maturity is being sold on January 01 at a future price amounting to $2,400. If the price of the future at the time of maturity stands to be $2,450. The contract multiplier stands to be $50. Therefore computation of the profit is shown below:

Profit=−Future price+Future contract price×Contract multiplier=−2450+2400×$50=−2500

Conclusion

Hence, it can be concluded that the profit accounts for $2,500

Answer 7

Chapter 17, Problem 1PS

Summary Introduction

To calculate:

The profit ascertained by the investor in the futures contract having maturity in the month of February

Introduction:

Profit refers to the act of sale of a stock or security so as to ascertain gain after the stock price has moved up from the price at which it was actually acquired by the investor. Profit taking action can impact the broad market, specific sector and even an individual stock.

Answer 8

Expert Solution & Answer

Explanation of Solution

In this situation, a future contract with February maturity is being sold on January 01 at a future price amounting to $2,400. If the price of the future at the time of maturity stands to be $2,450. The contract multiplier stands to be $50. Therefore computation of the profit is shown below:

Profit=−Future price+Future contract price×Contract multiplier=−2450+2400×$50=−2500