Fin 441
Homework # 1 (100 Points)
Do not use Excel Spreadsheet for homework. You must show calculations in
detail to earn credit. Homework must be typed with one-inch margin on all
sides.
1. Consider an option that expires in 72 days. The bid and ask disc
Homework 4
1. A grain elevator operator bought futures contract for 5,000 kilograms of rice at $1.50 per
kilogram. The initial margin is $4,000 and the maintenance margin is $2,000
a.
b.
c.
d.
IM-MM = 4000-2000=MC 2,000 Loss
2000/5000 = 0.40 cent Loss
Cur
FIN 441
Homework # 4 (200 points)
You must show appropriate equations (whenever applicable) and detailed
calculations to earn credit. Homework must be typed with one-inch margin
on all sides.
1.
A grain elevator operator bought a futures contract for 5,00
Fin 441
Homework # 2 (100 Points)
Do not use Excel Spreadsheet for homework. You must show
calculations in detail to earn credit. Homework must be typed (except
binomial tree and table showing hedge) with one-inch margin on all
sides.
1. Consider a stock
FIN 441
Homework #3 (100 points)
Show your work in a table like TABLE 5.2 to 5.4 in chapter 5 slides.
You must show calculations in detail to earn credit. Calculate T as
time to expiration in month(s) divided by 12. Do not use Excel
Spreadsheet for calcul
HW #2 Solutions
1.
(a) 25(1.15) = 28.75 and 25(0.85) = 21.25
(b) Cu = Max (0, 28.75 25) = 3.75 and Cd = Max (0, 21.25 25) = 0
(c) p = (1.10 0.85)/(1.15 0.85) = 0.8333 and 1 p = 0.1667
C = [(0.8333)(3.75) + (0.1667)(0.0)]/1.10 = 2.84
(d) h = (3.75 0.0)/(28