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FIU FIN4486 Homework 1 Chapters 1 & 2

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Question;?;An investor enters into a short oil futures;contract when the futures price is $15.5 per barrel. The contract size if 100;barrels of oil. How much does the investor gain or lose if the oil price at;the end of the contract equals $14.0?;Selected Answer;Answers;a.;-150.0;b.;150.0;c.;-1.5;d.;1.5;?;Question 2;0 out of 13 points;An investor enters into a long oil futures;contract when the futures price is $18.0 per barrel. The contract size if 100;barrels of oil. How much does the investor gain or lose if the oil price at;the end of the contract equals $16.75?;Selected Answer;Answers;a.;-125.0;b.;125.0;c.;1.25;d.;-1.25;?;Question 3;12 out of 12 points;Suppose that a September call option with a;strike price of $60 costs $14.0. Under what circumstances will the holder of;the option earn a profit? Let S equal the price of the underlying.;Selected Answer;Answers;a.;S > 46.0;b.;S 74.0;d.;S > 60;?;Question 4;13 out of 13 points;Suppose that a September put option with a strike;price of $60 costs $9.0. Under what circumstances will the holder of the;option earn a profit? Let S equal the price of the underlying.;Answers;a.;S 69.0;?;Question 5;12 out of 12 points;Suppose that a September put option with a strike;price of $95 costs $10.0. Under what circumstances will the seller (or;writer) of the option earn a profit? Let S equal the price of the underlying.;Answers;a.;S > 85.0;b.;S < 105.0;c.;S 95;?;Question 6;12 out of 12 points;Suppose you enter into a short position to sell;March Gold for $255 per ounce. The contract size is 100 ounces, the initial;margin is $2550 and the maintenance margin is $1020. At what price will you;receive a margin call?;Answers;a.;254.93;b.;270.3;c.;255.07;d.;239.7;?;Question 7;0 out of 12 points;Suppose that on October 24 you buy 12 March gold;futures contracts for $250 per ounce. At 11:00 am on October 25 you buy 10;more contracts for $245.5 ounce. At the close of trading on October 25, gold;futures settle for $239.0 ounce. If the contract size is 100 ounces and the;initial margin equals 2500, how much do you gain or lose as of the close?;Answers;a.;-6700.0;b.;-19700.0;c.;19700.0;d.;6700.0;?;Question 8;0 out of 13 points;Suppose that on October 24 you Sell 8 March gold;futures contracts for $345 per ounce. At 11:00 am on October 25 you buy 5;March contracts for $347.0 ounce. At the close of trading on October 25, gold;futures settle for $348.0 ounce. If the contract size is 100 ounces and the;initial margin equals 3450, how much do you gain or lose as of the close?;Answers;a.;-1900.0;b.;1900.0;c.;100.0;d.;-100.0

 

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