Question #2: Futures Contracts The chart below shows a quote for a futures contract on the NASDAQ 100 Index Delivery Date Futures Price NASDAQ 100 November 2020 9325.75 (a) This futures contract is an example of a(n) contract. Circle yŅır answer. No explanation is required Financial Futures Commodity Futures Interest Rate Futures Currency Futures (b) Assume that for the NASDAQ Futures contract the futures price is multiplied by a multiple of $100 to get the total contract value. If the margin requirement is 7%, how much must you deposit into your margin account to purchase three (3) November 2020 NASDAQ contracts? (c) Suppose the day after you purchased the 3 contracts, the NASDAQ 100 Index rises to 9400. What will happen to your margin account? (d) Suppose the NASDAQ 100 Index futures price rises by 5%. What is the percentage return on your investment on the 3 futures contracts?

Question #2: Futures Contracts The chart below shows a quote for a futures contract on the NASDAQ 100 Index Delivery Date Futures Price NASDAQ 100 November 2020 9325.75 (a) This futures contract is an example of a(n) contract. Circle yŅır answer. No explanation is required Financial Futures Commodity Futures Interest Rate Futures Currency Futures (b) Assume that for the NASDAQ Futures contract the futures price is multiplied by a multiple of $100 to get the total contract value. If the margin requirement is 7%, how much must you deposit into your margin account to purchase three (3) November 2020 NASDAQ contracts? (c) Suppose the day after you purchased the 3 contracts, the NASDAQ 100 Index rises to 9400. What will happen to your margin account? (d) Suppose the NASDAQ 100 Index futures price rises by 5%. What is the percentage return on your investment on the 3 futures contracts?

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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Related to a futures contract, what is the maintenance margin? Question 14 options: The amount of money necessary when a loss on a futures position requires you to allocate more funds to return the margin to the initial or original margin level. The existing balance in the margin account at any time over the lifetime of the contract The balance in the margin account on the settlement date The amount of money that is required to open a buy or sell position on a futures contract.
Demonstrate howa Margin Account operates for both the Long and the Short futures position using the following information (vou do not need to adjust the values gtven for contract size or yumber of contracts): The initial margin is R30. • The initial Futures price is R100. • On Day 1 the price drops to R90. • On Day 2 the price rises to R95. Fill in the correct monetary values for the margin account values (a) through to (f) in your answer booklet. Take care to show the signs (negative and positive) of your cash flows. LONG | SHORT DAY 0 (а) (c) (e) (b) (d) (f) DAY 1 DAY 2
Demonstrate how a Margin Account operates for both the Long and the Short futures position using the following information (you do not need to adjust the values given for contract size or number of contracts): [6 marks] The initial margin is R30. The initial Futures price is R100. On Day 1 the price drops to R90. On Day 2 the price rises to R95. Fill in the correct monetary values for the margin account values (a) through to (f) in your answer booklet. Take care to show the signs (negative and positive) of your cash flows. LONG SHORT DAY 0 (a) (b) DAY 1 (c) (d) DAY 2 (e) (f) REQUIRED : (A) , (B) , (C) , (D) ,(E) ,(F)
Demonstrate how a Margin Account operates for both the Long and the Short futures position using the following information (you do not need to adjust the values given for contract size or number of contracts): The initial margin is R30. The initial Futures price is R100. On Day 1 the price drops to R90. On Day 2 the price rises to R95.
1)Demonstrate how a Margin Account operates for both the Long and the Short futures position using the following information (you do not need to adjust the values given for contract size or number of contracts): The initial margin is R30. The initial Futures price is R100. On Day 1 the price drops to R90. On Day 2 the price rises to R95. Fill in the correct monetary values for the margin account values (a) through to (f) in your answer booklet. Take care to show the signs (negative and positive) of your cash flows. LONG SHORT DAY 0 (a) (b) DAY 1 (c) (d) DAY 2 (e) (f)
The theoretical futures price of a Treasury bond futures contract calculated using the formula:\\n\ \n"Future value of the spot price of bond A on the first delivery date - Future value of all coupons paid on bond A on the first delivery date" \\n\\nis $101-12.\ \n\\nThe actual futures price is $99-15.\\n\\nThe eligible deliverable bonds consist of bonds A, B, C, D, E, F, G, H, I, J, K, L, M, N.\\n\\nWhich of the following is correct?\\n\\n\\na.\\nA riskless arbitrage can be conducted by selling the futures contract and buying bond A\\n\\n\\nb.\\nlt is not possible to conduct a riskless arbitrage in this situation\\n\\n\\nc.\\nA riskless arbitrage can be conducted by buying the futures contract and short-selling bond A
which one is corect please confirm? Q8: An option that gives the owner the right to sell a financial instrument at the exercise price within a specified period of time is a put option call option swap premium
If KLSE-CI futures (i.e. FKLI) are at 1160, the cash price (KLSE-CI) is 1155, and the fair value (intrinsic) price for futures is 1157, what is the basis?
A Eurodollar futures price changes from 99.45 to 94.32. What is the gain or loss to an investor who is long 5 contracts? Choose the right answer: a. The investor makes gain – 128.25$ b. The investor makes loss – 641.25$ c. The investor makes loss – 195$ d. The investor makes gain – 195.25$ e. The investor makes loss – 128.25$
When trading a call option on futures, you have the to buy the futures contract at the strike price before expiration. right, but not the obligation O obligation O right and also obligation
a. A futures contract on a non-dividend-paying stock index with current value $130 has a maturity of one year. If the T-bill rate is 6%, what should the futures price be? b. What should the futures price be if the maturity of the contract is 2 years? c. What if the interest rate is 9% and the maturity of the contract is 2 years? Complete this question by entering your answers in the tabs below. Required A Required B Required C A futures contract on a non-dividend-paying stock index with current value $130 has a maturity of one year. If the T-bill rate is 6%, what should the futures price be? Note: Round your answer to 2 decimal places. Futures price
If the initial speculative margin of a futures contract is $2,000, the maintenance margin is $1,800 and your trading account balance has increased to $2,300, how much must you deposit to comply with your margin requirement?

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