Chapter_25

# Chapter_25 - Chapter 25 Problems 1-16 Input boxes in tan...

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Chapter 25 Problems 1-16 Input boxes in tan Output boxes in yellow Given data in blue Calculations in red Answers in green NOTE: Some functions used in these spreadsheets may require that the "Analysis ToolPak" or "Solver Add-in" be installed in Excel. To install these, click on "Tools|Add-Ins" and select "Analysis ToolPak and "Solver Add-In."

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Chapter 25 Question 1 Input Area: Final cocoa price \$1,402 Initial cocoa price \$1,435 Tons per contract 10 Output Area: Initial contract value \$14,350 Final contract value \$14,020 Gain/(Loss) \$(330)

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Chapter 25 Question 2 Input Area: Ending price per ounce \$11.15 Ending price per ounce \$9.05 Initial price per ounce \$10.1070 Ounces per contract 5,000 Number of contracts sold 5 Output Area: Initial contract value \$50,535.00 Final contract value \$11.15 \$55,750.00 Gain/(Loss) on short position \$(26,075.00) Final contract value \$9.05 \$45,250.00 Gain/(Loss) on short position \$26,425.00
Chapter 25 Question 3 Input Area: Exercise price per barrel \$35 # barrels bought 50,000 Oil prices: \$30 \$32 \$35 \$38 \$40 Output Area: The call option gives the manager the right to purchase oil futures contracts at a \$35 per barrel. The manager will exercise the option i \$35 Selling put options obligates the manager to buy o futures price of \$35 per barrel. The put holder will exerc falls below \$35 The payoffs per barrel are: Oil futures price: \$30.00 \$32.00 \$35.00 Value of call option position: \$- \$- \$- Value of put option position: \$(5.00) \$(3.00) \$- Total value: \$(5.00)### \$(3.00) \$- The payoff profile is identical to that of a forward contract with a \$ \$35

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futures price of if the price rises above oil futures contracts at a cise the option if the price \$38.00 \$40.00 \$3.00 \$5.00 \$- \$- \$3.00 \$5.00 strike price.
Chapter 25 Question 4 Input Area: # of long futures 10 Initial settle price \$480 Ounces per contract 100 Final settle price: Day 1 \$473 Day 2 \$479 Day 3 \$482 Day 4 \$486 Output Area: Initial value of position \$480,000 Day 1: New position value

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