ch13 - this position was closed out, the price of the...

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Chapter 13 Financial Futures Markets Answers to odd-numbered problems Problems 1. Spratt Company purchased Treasury bill futures contracts when the quoted price was 93.50. When this position was closed out, the quoted price was 94.75. Determine the profit or loss per contract, ignoring transaction costs. ANSWER: Purchase price = $935,000 Selling price = $947,500 Profit = $947,500 – $935,000 = $12,500 3. Toland Company sold Treasury bill futures contracts when the quoted price was 94.00. When this position was closed out, the quoted price was 93.20. Determine the profit or loss per contract, ignoring transaction costs. ANSWER: Selling price = $940,000 Purchase price = $932,000 Profit = $940,000 – $932,000 = $8,000 5. Egan Company purchased a futures contract on Treasury bonds that specified a price of 91-00. When
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Unformatted text preview: this position was closed out, the price of the Treasury bond futures contract was 90-10. Determine the profit or loss, ignoring transaction costs. ANSWER: Purchase price = $91,000 Selling price = $90,312 Profit = $90,312 $91,000 = $688 7. Marks Insurance Company sold S&P 500 stock index futures that specified an index of 1690. When the position was closed out, the index specified by the futures contract was 1,720. Determine the profit or loss, ignoring transaction costs. ANSWER: Selling price = $250 1,690 = $422,500 Purchase price = $250 1,720 = $430,000 Profit = $422,500 $430,000 = $7,500 89...
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