You purchased four April futures contracts on gold when the price quote was 692.5. Given today's closing prices as shown in the table, what is your current profit or loss?
Gold - 100 troy oz.: U.S. dollars and cents per troy oz.
Total profit to date = 4 × 100 × ($745 - $692.50) = $21,000
|
53.
|
You decided to speculate in the market and sold 8 gold futures contracts when the futures price was $867.50 per ounce. The price on the contract maturity date was $730.40. What was your total profit or loss if the contract size was 100 ounces?
Total loss = 8 × 100 × ($867.50 - $730.40) = $109,680
|
54.
|
You expect to deliver 42,000 bushels of wheat to the market in July. Today, you hedge your position by selling futures contracts on half of your expected delivery at the final price of the day. Assume that the market price turns out to be 582.0 when you actually deliver the wheat. How much more or less would you have earned if you had not bought the futures contracts?
Wheat - 5,000 bu.: U.S. cents per bu.
Loss on contract = (0.5 × 42,000) × [(582.0′ - 561.5′)/100] = $4,305. You would have received $4,305 more if you had not sold the futures contract.
|
55.
|
You are the buyer for a cereal company and you must buy 80,000 bushels of corn next month. The futures contracts on corn are based on 5,000 bushels and are currently quoted at 415′0 cents per bushel for delivery next month. If you want to hedge your cost, you should _____ contracts at a cost of _____ per contract.
Number of contracts = 80,000/5,000 = 16 contracts
Contract value = 5,000 × (415.0′/100) = $20,750. You should buy 16 contracts at $20,750 per contract. |
No comments:
Post a Comment