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W08 Solution - 1FINANCE 401 RYERSON UNIVERSITY Final Exam...

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1 FINANCE 401 RYERSON UNIVERSITY Final Exam – April 24, 2008 - SOLUTION Name:__________________________________ Student #:_______________________________ Professor:______________________________ _ - Time allowed: 3 hours - Aids allowed: None except for an 8’1/2” by 11’ double sided cheat sheet and a calculator - The exam is out of 60 marks. - There are 40 multiple choice questions. Each multiple choice question is worth 1 mark. - The remaining non -multiple choice questions are worth 20 marks. - Answer all multiple choice questions on the marksense sheet. - Answer all non-multiple choice questions in the space provided. - Please put your name, student number, and professor’s name on the front of this exam questionnaire AND at the top of the non-multiple choice section. - Print or write VERY NEATLY. If I can’t read your writing, your answers won’t get marked. 1. You buy 15 wheat futures contracts when the price is $2.61 per bushel (each contract is for 5,000 bushels). The price on the maturity date is $2.21. What is your payoff? a) -$30,000 b) -$2,000 c) $0 d) $2,000 e) $30,000 2. You sell 10 gold futures contracts when the futures price is $342.70 per ounce (each contract is for 100 ounces). The price on the maturity date is $302.30. What is your payoff? 3. You buy one futures contract for 5,000 bushels of soybeans with a settlement price of $6.92 per bushel. If the price is $7.58 per bushel at the contract expiration, what is your payoff? 1
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4. You purchased a May American call option on Netscape stock with an exercise price of $165. Which of the following statements is true? Use the following information to answer the next SIX questions. Option OutTel Call Put Share Price Strike Exp. Vol. Last Vol. Last 25 20.0 Jan. 101 6 69 1 25 20.0 Feb. 79 7 54 2 25 22.5 Mar. 65 5 40 4
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