You sold one soybean future contract at 513 per

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43. You sold one soybean future contract at $5.13 per bushel. What would be your profit (loss) at maturity if the wheat spot price at that time were $5.26 per bushel? Assume the contract size is 5,000 ounces and there are no transactions costs. A. $65 profit B. $650 profit C. $650 loss D. $65 loss E. none of the above. $5.13 - $5.26 = -$0.13 X 5,000 = -$650. Difficulty: Moderate 22-23
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Chapter 22 - Futures Markets 44. You bought one soybean future contract at $5.13 per bushel. What would be your profit (loss) at maturity if the wheat spot price at that time were $5.26 per bushel? Assume the contract size is 5,000 ounces and there are no transactions costs. $5.26 - $5.13 = $0.13 X 5,000 = $650. Difficulty: Moderate 22-24
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Chapter 22 - Futures Markets 45. On April 1, you bought one S&P 500 index futures contract at a futures price of 950. If on June 15 th the futures price were 1012, what would be your profit (loss) if you closed your position (without considering transactions costs)? $1012 - $950 = $62 X 250 = $15,500 Difficulty: Difficult 46. On April 1, you sold one S&P 500 index futures contract at a futures price of 950. If on June 15 th the futures price were 1012, what would be your profit (loss) if you closed your position (without considering transactions costs)? $950 - $1012 = -$62 X 250 = -$15,500 Difficulty: Difficult 22-25
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Chapter 22 - Futures Markets 47. The expectations hypothesis of futures pricing A. is the simplest theory of futures pricing. B. states that the futures price equals the expected value of the future spot price of the asset. C. is not a zero sum game. D. A and B. E. A and C. The expectations hypothesis relies on the concept of risk neutrality; i.e., if all market participants are risk neutral, they should agree on a futures price that provides an expected profit of zero to all parties. Difficulty: Easy 22-26
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Chapter 22 - Futures Markets 48. Normal backwardation Risk premiums in this theory are based on total variability. Difficulty: Easy
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