Question

A futures trader enters a short futures contract on rough rice. The price is $15 per...

A futures trader enters a short futures contract on rough rice. The price is $15 per one hundredweight. The contract is for the delivery of 45 thousand hundredweights. What was the price at the end of the contract if the trader: (i) made a gain from the trade of $2250; (ii) made a loss from the trade of $3600?

Please help..

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Short Future Price(S0) = $15 per one hundred weight

Contract size(quantity) = 45,000

Quantity in hundred weight = 45,000/100 = 450

(i)

Gain = $2,250

Gain per hundred weight = 2250/450 = $5

Price at end of contract = S1

Price at end of contract = $10 per hundred weight

ii)

Loss = -$3,600

Loss per hundred weight = -3,600/450 = -$5

Price at end of contract = $23 per hundred weight

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A trader enters into a short position in ten Eurodollar futures contract (sell 10 contracts). How...
A trader enters into a short position in ten Eurodollar futures contract (sell 10 contracts). How much does the trader gain (or lose) when the futures price quote increases by 15 basis points?
A trader enters into a short forward contract on 100 million yen. The forward exchange rate...
A trader enters into a short forward contract on 100 million yen. The forward exchange rate is $0.008 per yen. How much does the trader gain or lose if the exchange rate at the end of the contract is (a) $0.0074 per yen; (b) $0.0091 per yen? 5. A cattle farmer expects to have 120,000 pounds of live cattle to sell in three months. The live-cattle futures contract on the Chicago Mercantile Exchange is for the delivery of 40,000 pounds...
Question 1 i) A trader enters into an Australian Dollar futures contract to buy $A150,000 at...
Question 1 i) A trader enters into an Australian Dollar futures contract to buy $A150,000 at a price of US$.8060 per Australian dollar. The initial margin on this contract is US$6,000 and the maintenance margin is $3,100. At what futures price will the maintenance margin level be reached? ii) Suppose that on Feb 10, 2018 you bought an ASX S&P 200 Share Price Index (SPI) futures contract at an index level of 3999. Four weeks later you closed out this...
A trader buys two September futures contracts on orange juice when the futures price is 160...
A trader buys two September futures contracts on orange juice when the futures price is 160 cents per pound. Each contract is for the delivery of 15,000 lbs of orange juice. How much does the trader lose or gain if the orange juice price at the end of the contract is 145 cents per pound? a) $3000 profit b) $4500 loss c) $1500 profit d) $1500 loss e) $4500 profit
1. True or False: the forward price is the price the forward contract buyer needs to...
1. True or False: the forward price is the price the forward contract buyer needs to pay to the seller to enter the contract. Explain. 2. A trader enters into a SHORT position in a cotton futures contract when the futures price is 50 cents per pound yesterday. The contract is for the delivery of 50,000 pounds. How much does the trader gain or lose totally if the futures price at the end of today is 48.20 cents per pound;...
1. True or False: the forward price is the price the forward contract buyer needs to...
1. True or False: the forward price is the price the forward contract buyer needs to pay to the seller to enter the contract. Explain. 2. A trader enters into a SHORT position in a cotton futures contract when the futures price is 50 cents per pound yesterday. The contract is for the delivery of 50,000 pounds. How much does the trader gain or lose totally if the futures price at the end of today is 48.20 cents per pound;...
A trader short sells four July futures contracts on frozen orange juice. Each contract is for...
A trader short sells four July futures contracts on frozen orange juice. Each contract is for the delivery of 10,000 pounds. The current futures price is 260 cents per pound, the initial margin is $5,000 per contract, and the maintenance margin is $4,000 per contract. (a) What price change would lead to a margin call? (b) Under what circumstances could $4,000 be withdrawn from the margin account? (b) Under what circumstances could $4,000 be withdrawn from the margin account?
A farmer enters into a short corn futures contract at a price of $2.80 per bushel....
A farmer enters into a short corn futures contract at a price of $2.80 per bushel. The spot price of corn drops to $2.65 when the contract expires. The farmer harvested 13,000 bushels of corn and had futures contracts on only 10,000 bushels of corn. The farmer is obligated to ___ (receive/deliver) the corn when the contract expires. What is the farmer’s total net proceeds if he sold all his corn harvest at the contract’s expiration?  
On March 1, 2013, a trader buys a June 2013 gold futures contract at a price...
On March 1, 2013, a trader buys a June 2013 gold futures contract at a price of $380 per ounce. The trader calculated the futures price range from the cost of carry model and found that this gold futures contract should trade at a price between $390 and $430. Which of the following statements about this June futures contract is correct? The trader can get quick arbitrage profits by engaging in either cash and carry strategy or reverse cash and...
Suppose that you enter into a short futures contract to sell July silver for $29.80 per...
Suppose that you enter into a short futures contract to sell July silver for $29.80 per ounce. The size of the contract is 5000 ounces. The initial margin is $ 3500, and the maintenance margin is $2500. What change in the futures price will lead to a margin call? A trader buys two July futures contracts on orange juice. Each contract is for the delivery of 15,000 pounds. The current futures price is 170 cents per pound, the initial margin...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT