Exam 22: Futures Markets

Which of the following items is not specified in a futures contract?I) The contract sizeII) The maximum acceptable price range during the life of the contractIII) The acceptable grade of the commodity on which the contract is heldIV) The market price at expirationV) The settlement price

Given a stock index with a value of $1,100, an anticipated dividend of $27, and a risk-free rate of 3%, what should be the value of one futures contract on the index?

Contango

You hold one long corn futures contract that expires in April. To close your position in corn futures before the delivery date you must

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 bushels and there are no transactions costs.

You sold one corn future contract at $6.29 per bushel. What would be your profit (loss) at maturity if the corn spot price at that time were $6.10 per bushel? Assume the contract size is 5,000 bushels and there are no transactions costs.

A trader who has a __________ position in gold futures wants the price of gold to __________ in the future.

Financial futures contracts are actively traded on which of the following indices?

If a trader holding a long position in corn futures fails to meet the obligations of a futures contract, the party that is hurt by the failure is

An increase in the basis will __________ a long hedger and __________ a short hedger.

Given a stock index with a value of $1,125, an anticipated dividend of $33, and a risk-free rate of 4%, what should be the value of one futures contract on the index?

If you determine that the DAX-30 Index futures is underpriced relative to the spot DAX-30 Index, you could make an arbitrage profit by

Agricultural futures contracts are actively traded on

Taxation of futures trading gains and losses

You purchased one silver future contract at $2 per ounce. What would be your profit (loss) at maturity if the silver spot price at that time is $3.50 per ounce? Assume the contract size is 5,000 ounces and there are no transactions costs.

With regard to futures contracts, what does the word "margin" mean?

Financial futures contracts are actively traded on the following indices except

On January 1, the listed spot and futures prices of a Treasury bond were 93.80 and 93.25. You purchased $100,000 par value Treasury bonds and sold one Treasury bond futures contract. One month later, the listed spot price and futures prices were 94 and 94.50, respectively. If you were to liquidate your position, your profits would be a

Given a stock index with a value of $1,500, an anticipated dividend of $62 and a risk-free rate of 5.75%, what should be the value of one futures contract on the index?

Given a stock index with a value of $1,200, an anticipated dividend of $45, and a risk-free rate of 6%, what should be the value of one futures contract on the index?