Sample_exam1_F5108_08

Sample_exam1_F5108_08 - Sample Exam Problems(Questions Exam...

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Sample Exam Problems (Questions) Exam 1 Finance 5108 1. Contrast a futures contract with a forward contract. Forward Future Private btn 2 parties Traded on exchange Not stdized std contract Usually one specified delivery date range of delivery dates Settled at end of contract Settled daily Delivery or final cash settlement usually closed out prior to maturity Some credit risk virtually no risk 2. You are long 5 futures contract for which the initial margin is $3,000 and the maintenance margin is $2,500(note these is per contract). If you initially had $18,000 in equity in the account at what level price would you get a margin call? Assume that the contract trades in % and 32nds of 1 % and has a face value of $100,000 and you entered into a long position at 110:00. 18000-12500=5500/5=1100 1100/.3125*.01=35.2 ~ 36 ticks 110-1-4/32=108’28 3. Suppose that you are working for a firm that hedges all of its exposure to price fluctuations. Your firm has just decided it needs to purchase 250,000 barrels of Brent crude oil for one of its refineries in May. You are in charge of taking care to
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