CH 7 Columns Answers - 1. 2. ACME September delivery...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
1. ACME contract on €125,000 with September delivery a) Is an example of a futures contract 2. Yesterday, you entered into a futures contract to buy €62,500 at $1.20 per €. Suppose that the futures price closes today at $1.16. How much have you made/lost? a) You have lost $2,500.00 3. In reference to the futures market, a “speculator” a) attempts to profit from a change in the futures price 4. Comparing “forward” and “futures” exchange contracts, we can say that: a) Their major difference is in the way the underlying asset is priced for future purchase or sale: futures settle daily and forwards settle at maturity. b) A futures contract is negotiated by open outcry between floor brokers or traders and is traded on organized exchanges, while forward contract is tailor-made by an international bank for its clients and is traded OTC. d b) and c) 5. Comparing “forward” and “futures” exchange contracts, we can say that a) Delivery of the underlying asset is seldom made in futures contracts b) Delivery of the underlying asset is usually made in forward contracts d a) and b) 6. In which market does a clearinghouse serve as a third party to all transactions? a) Futures 7. In the event of a default on one side of a futures trade, a) The clearing member stands in for the defaulting party b) The clearing member will seek restitution for the defaulting party d a) and b) 8. Yesterday, you entered into a futures contract to buy €62,500 at $1.20 per €. Your initial performance bond is $1,500 and your maintenance level is $500. At what settle price will you get a demand for additional funds to be posted? a) $1.1840 per €. 9. Yesterday, you entered into a futures contract to sell €62,500 at $1.20 per €. Your initial performance bond is $1,500 and your maintenance level is $500. At what settle price will you get a demand for additional funds to be posted? a) $1.2160 per €. 10. Three days ago, you entered into a futures contract to sell €62,500 at $1.20 per €. Over the past three days the contract has settled at $1.20, $1.22, and $1.24. How much have you made or lost? a) Lost $0.04 per € or $2,500 11. Today’s settlement price on a Chicago Mercantile Exchange (CME) Yen futures contract is $0.8011/¥100. Your margin account currently has a balance of $2,000. The next three days’ settlement prices are $0.8057/¥100, $0.7996/¥100, and $0.7985/¥100. (The contractual size of one CME Yen contract is ¥12,500,000). If you have a short position in one futures contract, the changes in the margin account from daily marking-to- market will result in the balance of the margin account after the third day to be a) $2,325 12. Today’s settlement price on a Chicago Mercantile Exchange (CME) Yen futures contract is $0.8011/¥100. Your margin account currently has a balance of $2,000. The next three days’ settlement prices are $0.8057/¥100, $0.7996/¥100, and $0.7985/¥100.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/30/2010 for the course CHM chemisty l taught by Professor ? during the Spring '10 term at University of North Carolina Wilmington.

Page1 / 2

CH 7 Columns Answers - 1. 2. ACME September delivery...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online