Chapter 14-16 Assignments

Chapter 14-16 Assignments - FIN 355 Homework Chapter 14...

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FIN 355 Homework Chapter 14 (P495-497): Questions and Problems 3, 6–12, 14, 15, 17, 22 Chapter 15 (P537-539): Questions and Problems 1, 2, 8, 9, 10, 15, 16, 20, 21 Chapter 16 (P575-576): Concept Questions: 7; Questions and Problems 9, 10
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1 Chapter 14 Futures Contracts 3. The contract settled down 3.25 cents, so a short position gains: 15 × 5,000 × $0.0325 = $2,437.50. 6. F 6/12 = $17.81(1 + .05) 6/12 = $18.25 7. $94.90 = S(1 + .045) 2/12 ; S = $94.21 8. $59.92 = $58.13(1 + R) 4/12 ; R = .0953 9. F 4/12 = $49.24(1 + .054 – .015) 4/12 = $49.87 10. $27.18 = S(1 + .045 – .0125) 6/12 ; S = $26.75 11. If the contract settles down, a long position loses money. The loss per contract is: 42,000 × $.05 = $2,100, so when the account is marked-to-market and settled at the end of the trading day, your balance per contract is $6,300, which is less than the maintenance margin, so you will receive a margin call. The maximum price change for a margin call is ($8,400 - $7,200) = 42,000 × X , or X = $.02857 = 2.857 cents per gallon. 12. Establish your account at an initial margin of 10 × $12,000 = $120,000. Your maintenance margin is 10 × $11,200 = $112,000. The initial value of the position is 10 × 100 × $975 = $975,000. Day 1: New position value = 10 × 100 × $964 = $964,000, for a loss of $11,000. Your margin account balance is now $109,000. You must meet a margin call of $11,000,
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This note was uploaded on 11/18/2011 for the course FIN 355 taught by Professor Phsiao during the Fall '08 term at S.F. State.

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Chapter 14-16 Assignments - FIN 355 Homework Chapter 14...

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