Q1 Suppose you short 21 contracts of E-Mini S&P 500 futures at 4,486. The next day, their price goes to 4,512. What would be the profit or loss if you closed your short position at that price?

Q1 Suppose you short 21 contracts of E-Mini S&P 500 futures at 4,486.  The next day, their price goes to 4,512.  What would be the profit or loss if you closed your short position at that price?

Q2 Suppose you bought 33 futures contracts of gold (contract size = 100 oz.)  The current futures price is $1,791      per ounce. The initial margin is $9,900 per contract, the maintenance margin is $9,000/contract.   At what price level would you receive a margin call?

Q3 The spot exchange rate for Britain and US is currently at 1.3845 ($ per pound). Britain’s continuously compounded risk-free rate is 1.50%.  The U.S. continuously compounded risk-free is 0.50%.  Calculate the 8-month forward exchange rate.

Q4 The S&P 500 Index is currently trading at 4,500. The continuously compounded risk-free rate is 0.25%. The dividend yield (continuous comp.) is 1.30%. Calculate the fair-value futures price expiring in 10 months.

Q5 An investor holds 20,000 shares of a certain stock. The stock is currently trading at $245.00 per share.   

He is interested in hedging against short-term movements in the market and decides to use E-Mini S&P 500  futures to hedge his exposure.  The Index is currently at 4,500.  Contract size = $50 times index.

The Beta of the Stock is 1.2.  Calculate how many E-Mini S&P 500 futures contracts are needed to hedge the investor’s holdings against downside price risk.  What position (long or short) is required?

Q7 Explain how margins in futures markets are both a blessing and a curse.  From a risk management perspective, what are the pros and cons of margin requirements in futures?

Q8 Why are futures prices and forward prices often different when, in principle, they have the same fair value calculation in principle?

Show more

Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more