Gold is currently trading at $1,645.50 per ounce with a carrying cost price of $1,693.97 per ounce for a four-month futures contract, what is the potential carry trade profit per ounce if the interest rate is 3%? Multiple Cholce $125 $4.97
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- Three months ago an investor purchased a six-month US Treasury bond forward contract with a notional value of $10,000,000 at a price of 150. Assume the current forward price for a contract with three months to maturity is 152, and the risk-free rate is 1.0%. The value of the forward position is: $199,503 $100,000 $200,000 Question 10 Assume an asset sells in the spot market for a price of $30. The risk-free rate is 3%, and the forward contract on the asset expires in six months. If the asset pays a dividend of $0.75 and storage costs are $0.50 a year, what is the correct forward price? $31.25 $30.25 $30.19Finance Initial Futures Contract price = 0.1529$ per Ib Contract size = 60000 lbs Initial Margin requirement = 10 % Maintenance margin = 600$ Assume the volatility of Soybean Oil immediately increases 20%. How will it impact Futures price? How will it impact investor's margin account requirement? Explain your answer.Suppose you sell seven March 2021 silver futures contracts on December 4, 2020, at the last price of the day. Use Table 25.2. a. What will your profit or loss be if silver prices turn out to be $25.01 per ounce at expiration? (Enter your answer as a positive value. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. What will your profit or loss be if silver prices are $23.13 per ounce at expiration? (Enter your answer as a positive value. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) a. b.
- The current spot price of the rare element Pb is 500.00 per ounce. The 9-month forward price of one ounce of Pb is 511.92. What is the continuously compounded risk-free interest rate implied by these prices? Possible Answers A 2.14% B 3.14% 4.14% 05.14% Not enough information was givenTyson Inc. wants to hedge an account receivable of ¥595 million to be received in six months using a money market hedge. Given a yen borrowing rate of 6% APR how much will Tyson Inc. need to borrow today in order to match the payment it will receive in six months? Question 7 options: ¥577.7 million ¥595 million ¥561.3 million ¥586.2 millionThe spot price of silver is $13.32/oz. The total interest rate on 3-month loan and deposit is .33%. 1. Suppose that the 3-month silver futures contract is actually traded at $13.43/oz. Determine if an arbitrage opportunity is present. 2. If so, what trading strategy takes advantage of this arbitrage opportunity and calculate the payoff strategy?
- Q1 A short forward contract on a commodity that was negotiated some time ago will expire in 8 months and has a delivery price of $44. The current spot price of the commodity is $52. The risk-free interest rate (with continuous compounding) is 0.06. What is the value of the short forward contract? Q2 Alrajhi Bank plans to pay a dividend of 3 per share both 3 and 5 from today. Alrajhi share price today is 78 SAR and the continuously compounded interest rate is 0.07. What is the price of a 9-month forward contract? Q3 An investor shorts 122 shares when the share price is $94 and closes out the position 4 months later when the share price is $98. The shares pay a dividend of $6 per share during the 4 months. How much does the investor gain or lose?which one is correct please confirm? Q9: "a 90 day USD T-bill with a face value of USD1,000,000 sold at a discount rate of 5.25%. What would be the true yield " 5.320% 5.46% 4.86% 3.25%Generous Dynamics is planning on buying 3000 ounces of gold in six months. The correlation of the six-month change in the spot and futures price is. 5. The standard deviation of six-month change in spot and futures price are 27 percent and 31 percent, respectively. Futures contract size is 1000 ounces. How many contracts should GD buy or sell to hedge the future purchase? O Sell 1.3065 O Buy 1.3065 O Sell 1.7222 O Buy 1.7222 O Sell 2.6129
- Q1 A long forward contract on a commodity that was negotiated some time ago will expire in 1 months and has a delivery price of $70. The current spot price of the commodity is $59. The risk-free interest rate (with continuous compounding) is 0.09. What is the value of the long forward contract? Q2 A short forward contract on an investment asset that yields 0.08 and was negotiated some time ago will expire in 4 months and has a delivery price of $50. The current spot price of the commodity is $48. The risk-free interest rate (with continuous compounding) is 0.02. What is the value of the short forward contract? Q3 A long forward contract on a commodity that was negotiated some time ago will expire in 2 months and has a delivery price of $76. The current spot price of the commodity is $66. The risk-free interest rate (with continuous compounding) is 2.2%. What is the value of the long forward contract?Given the following information, what would you expect to be the minimum price at which a 3 month futures contract for 100 bushels of wheat would be trading? The spot price of wheat is $8 per bushel. Storage and insurance costs for wheat are $.50 per 100 bushels, per month, payable at the end of the storage period. • You can borrow money at 8% per year. a) $865.50 b) $814.50 c) $816.50 d) $817.5A T-bill with face value $10,000 and 62 days to maturity is quoted at 3.65%-3.63% on a bank discount yield (bid-ask). How much would you pay to buy one 62 day T-bill? $9.958.13 $9,937.48 $9,937.14 $9.956.63 Days 18 39 45 62 Bid 2.87% 3.21% 3.47% 3.65% Ask 2.83% 3.11% 3.35% 3.63%