Exam 22: Equity Valuation Models

On January 1,you bought one April S&P 500 index futures contract at a futures price of 420.If on February 1 the April futures price were 430,what would be your profit (loss)if you closed your position (without considering transactions costs)?

On April 1,you sold one S&P 500 index futures contract at a futures price of 950.If on June 15^th the futures price were 1012,what would be your profit (loss)if you closed your position (without considering transactions costs)?

Which one of the following statements is true?

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

Metals and energy currency futures contracts are actively traded on

If you determine that the DAX-30 index futures is overpriced relative to the spot DAX-30 index you could make an arbitrage profit by

Describe the types of traders that are active in the futures markets.Explain why each type is in the markets and how their goals differ.Give an example of how each might use the market.

The terms of futures contracts __________ standardized,and the terms of forward contracts __________ standardized.

You bought 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 ounces and there are no transactions costs.

A decrease in the basis will __________ a long hedger and __________ a short hedger.

To exploit an expected decrease in interest rates,an investor would most likely

You purchased the following futures contract today at the settlement price listed in the Wall Street Journal.Answer the questions below regarding the contract. - What is the total value of the futures contract? - If there is a 10% margin requirement how much do you have to deposit? - Suppose the price of the futures contract changes as shown in the following table. - Enter the relevant information into the table.Show your calculations. - Explain why the account is marked-to-market daily.

On January 1,the listed spot and futures prices of a Treasury bond were 95.4 and 95.6.You sold $100,000 par value Treasury bonds and purchased one Treasury bond futures contract.One month later,the listed spot price and futures prices were 95 and 94.4,respectively.If you were to liquidate your position,your profits would be

Which one of the following statements regarding delivery is false?

Contango

Financial futures contracts are actively traded on the following indices

Speculators may use futures markets rather than spot markets because

Taxation of futures trading gains and losses

If you took a long position in a pork bellies futures contract and then forgot about it,what would happen at the expiration of the contract?

Which one of the following statements is false?