FIN_II_PS1_2017.pdf - FINANCE II Exercise set 1 1 You sold...

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FINANCE II Exercise set 1 1.You sold a futures contract on oats at a futures price of 233.75 cents per bushel and at the time of expiration the price was 261.25 cents per bushel. What was your profit or loss if there are 5,000 bushels per contract? 2.Suppose you buy one corn contract for March delivery listed in CBOT. If the contract closes in March at 787.25, what will your profit be? The prices are quoted in cents per bushel and there are 5,000 bushels per contract. Month Last Change Open High Low Volume Open Interest Dec 2012 783’412’2772’4785’6755’6179014 499807 Mar 2013 783’211’4772’4784’4757’224738 135778 May 2013 779’611’2769’2780’4755’08119 21882 3.Short-term municipal bonds currently offer yields of 4 %, while comparable taxable bonds pay 5 %. What is your after-tax yield if your tax bracket is: a.Zero (which is the case for some funds) b.10 % c.20 % d.30 %

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