Question 1

A futures on a stock with a continuous dividend yield of 1.6 percent is currently selling for $93.12. The futures expires in four months, and the risk-free rate of interest is 5.3 percent. What is the current stock price?

Accepted Answer

The answer of A futures on a stock with a...

Question 2

10-year Canada Treasury bonds $100K, pts of 100%, 1 pt = $10

$\begin{array}{|r|r|l|r|r|r|r|r|r|}
\hline \text { sea hi } & \text { sea lo } & \text { mth } & \text { Open } & \text { high } & \text { low } & \text { settle } & \text { chg } & \text { op int } \
\hline 113.78 & 110.05 & \text { Mar } 05 & 112.80 & 113.22 & 112.78 & 112.95 & +0.05 & 139272 \
\hline 112.44 & 111.94 & \text { Jun } 05 & 112.10 & 112.44 & 112.00 & 112.16 & +0.05 & 46212\
\hline 
\end{array}$
-What is the dollar value of the June Canada bond futures contract at the closing price?

Accepted Answer

To calculate the dollar value of the June Canada bond futures contract, we first need to convert the settlement price from points to dollars. Each point represents $10, so we multiply the settlement price of 112.16 by $10 to get $1,121.60.

Next, we need to calculate the notional value of the bond futures contract. This is done by multiplying the settlement price by the face value of the bond ($100,000). Thus, the notional value of the June Canada bond futures contract is $112,160 ($1,121.60 x $100,000).

Therefore, the correct answer is D, $112,160.00.

Question 3

S&P 400 Midcap (CME) - $500 * Index

$\begin{array}{lcccccccc} 
& & & & & &{\text { Lifetime }} && \text { Open } \
& \text { Open } & \text { High } & \text { Low } & \text { Settle } & \text { Chg } & \text { High } & \text { Low } & \text { Int } \
\text { Mar } & 502.25 & 506.30 & 497.25 & 505.75 & +2.50 & 532.50 & 474.15 & 1,432 \
\text { Apr } & 501.25 & 508.75 & 496.75 & 504.30 & -1.25 & 540.35 & 478.30 & 867
\end{array}$
-What was your profit if you sold fifteen April S&P Midcap 400 futures at the close on the previous day and closed your position on the closing price this day?

Accepted Answer

The answer of S&P 400 Midcap (CME) - $500 *...

Question 4

S&P 400 Midcap (CME) - $500 * Index

$\begin{array}{lcccccccc} 
& & & & & &{\text { Lifetime }} && \text { Open } \
& \text { Open } & \text { High } & \text { Low } & \text { Settle } & \text { Chg } & \text { High } & \text { Low } & \text { Int } \
\text { Mar } & 502.25 & 506.30 & 497.25 & 505.75 & +2.50 & 532.50 & 474.15 & 1,432 \
\text { Apr } & 501.25 & 508.75 & 496.75 & 504.30 & -1.25 & 540.35 & 478.30 & 867
\end{array}$
-What is the value of a March S&P 400 Midcap futures at the opening price of the day?

Accepted Answer

The answer of  S&P 400 Midcap (CME) - $500...

Question 5

-You sold three January silver futures contracts at a quote of 432.8. You closed your position at the opening price of the day. What was your dollar return?

Accepted Answer

The answer of 
-You sold three January silver futures contracts...

Question 6

A futures on a stock with six months to expiration is currently selling for $108.32. If the risk-free rate of interest is 5.1 percent, what is the stock price?

Accepted Answer

We can use the formula: 
Futures price = Spot price x e^(r x t)
where r is the risk-free interest rate, t is the time to expiration in years. 
Plugging in the given values,
$108.32 = Spot price x e^(0.051 x 0.5)
Spot price = $105.66 (rounded to the nearest cent)

Question 7

0-year Canada Treasury bonds $100K, pts of 100%, 1 pt = $10

$\begin{array}{|r|r|l|r|r|r|r|r|r|}
\hline \text { sea hi } & \text { sea lo } & \text { mth } & \text { Open } & \text { high } & \text { low } & \text { settle } & \text { chg } & \text { op int } \
\hline 113.78 & 110.05 & \text { Mar } 05 & 112.80 & 113.22 & 112.78 & 112.95 & +0.05 & 139272 \
\hline 112.44 & 111.94 & \text { Jun } 05 & 112.10 & 112.44 & 112.00 & 112.16 & +0.05 & 46212\
\hline 
\end{array}$
-You purchased nine June Canada bond futures at the low price of the day and sold them for the closing price. What was your dollar return?

Accepted Answer

The answer of 0-year Canada Treasury bonds $100K, pts of...

Question 8

A stock is currently selling for $104.12, and has a continuous dividend yield of 1.8 percent. What is the price of a futures contract on the stock that expires in five months if the risk-free rate of interest is 4.5 percent?

Accepted Answer

The answer of A stock is currently selling for $104.12,...

Question 9

S&P 400 Midcap (CME) - $500 * Index

$\begin{array}{lcccccccc} 
& & & & & &{\text { Lifetime }} && \text { Open } \
& \text { Open } & \text { High } & \text { Low } & \text { Settle } & \text { Chg } & \text { High } & \text { Low } & \text { Int } \
\text { Mar } & 502.25 & 506.30 & 497.25 & 505.75 & +2.50 & 532.50 & 474.15 & 1,432 \
\text { Apr } & 501.25 & 508.75 & 496.75 & 504.30 & -1.25 & 540.35 & 478.30 & 867
\end{array}$
-You purchased eight March S&P Midcap futures at a price of 482.15 and sold them at the low price of the day. What was your dollar return?

Accepted Answer

To calculate the dollar return, we need to use the following formula:

Dollar return = (Sell price - Buy price) x Contract size x Number of contracts

Sell price is given as the low price of the day, which is 497.25. Buy price is given as 482.15. Contract size is $500 per index, and the number of contracts is 8.

Dollar return = (497.25 - 482.15) x $500 x 8 
Dollar return = $15.10 x $500 x 8 
Dollar return = $60,400

Therefore, the answer is A) $60,400, which is the only option that matches the calculated dollar return.

Question 10

A stock is selling for $93.12, and a futures contract on the stock that expires in seven months is selling for $95.27. What is the risk-free rate of interest?

Accepted Answer

The answer of A stock is selling for $93.12, and...

Question 11

-You purchased eight February silver contracts at the low price for the day, and sold them at the closing price. What was your profit on this transaction?

Accepted Answer

The answer of 
-You purchased eight February silver contracts at...

Question 12

-What was your dollar return?

Accepted Answer

The answer of 
-What was your dollar return?
...

Question 13

0-year Canada Treasury bonds $100K, pts of 100%, 1 pt = $10

$\begin{array}{|r|r|l|r|r|r|r|r|r|}
\hline \text { sea hi } & \text { sea lo } & \text { mth } & \text { Open } & \text { high } & \text { low } & \text { settle } & \text { chg } & \text { op int } \
\hline 113.78 & 110.05 & \text { Mar } 05 & 112.80 & 113.22 & 112.78 & 112.95 & +0.05 & 139272 \
\hline 112.44 & 111.94 & \text { Jun } 05 & 112.10 & 112.44 & 112.00 & 112.16 & +0.05 & 46212\
\hline 
\end{array}$
-You purchased one March Canada bond futures contract at the opening price of the day, and sold it for the closing price. What was your dollar profit?

Accepted Answer

The profit is calculated based on the difference between the selling price and the buying price, multiplied by the contract size. The opening price was 112.80, and the closing price was 112.95. The difference is 0.15 points. Since 1 point = $10, the profit is 0.15 * $10 * $100,000 / 100 = $150.00.

Question 14

A futures contract on as stock is currently selling for $81.87. The contract expires in three months, and the stock is selling for $80.65. What is the risk-free rate of interest?

Accepted Answer

To solve this problem, we need to use the formula for the cost of carry model:
F = S × e^(r × t)
Where: 
F = Futures price
S = Stock price
r = Risk-free interest rate
t = Time to expiration

We know the futures price (F) is $81.87, the stock price (S) is $80.65, and the time to expiration (t) is 3 months or 0.25 years. We can rearrange the formula to solve for the risk-free interest rate (r):
r = ln(F/S) / t

Plugging in the values, we get:
r = ln(81.87/80.65) / 0.25
r = 0.0619 or 6.19%

Therefore, the best choice is A as it matches the calculated answer.

Question 15

There is a futures contract on a stock that expires in nine months. The current stock price is $93.12. If the risk-free rate is 6.25 percent, what is the futures price?

Accepted Answer

The futures price can be calculated using the formula: 
Futures Price = Spot Price * e^(risk-free rate * time to expiration)

Plugging in the values, we get:

Futures Price = $93.12 * e^(0.0625 * (9/12))
Futures Price = $97.45

Therefore, the answer is choice C.

Question 16

A stock is currently selling for $59.76. A futures contract on the stock expires in three months. If the risk-free rate of interest is 4.5 percent, what is the futures price?

Accepted Answer

The answer of A stock is currently selling for $59.76....

Question 17

There is a futures contract on a stock that expires in 7 months. The stock is currently priced at $78.32, and has a continuous dividend yield of 1.4 percent. If the risk-free rate of interest is 4.9 percent, what is the futures price?

Accepted Answer

The answer of There is a futures contract on a...

Question 18

0-year Canada Treasury bonds $100K, pts of 100%, 1 pt = $10

$\begin{array}{|r|r|l|r|r|r|r|r|r|}
\hline \text { sea hi } & \text { sea lo } & \text { mth } & \text { Open } & \text { high } & \text { low } & \text { settle } & \text { chg } & \text { op int } \
\hline 113.78 & 110.05 & \text { Mar } 05 & 112.80 & 113.22 & 112.78 & 112.95 & +0.05 & 139272 \
\hline 112.44 & 111.94 & \text { Jun } 05 & 112.10 & 112.44 & 112.00 & 112.16 & +0.05 & 46212\
\hline 
\end{array}$
-You purchased four June Canada bond futures contracts at the season low of the contract and covered your position at the opening price of the day. What was your dollar profit?

Accepted Answer

The profit is calculated based on the difference between the buying price (season low) and the selling price (opening price) for the June contract. The season low is 111.94, and the opening price is 112.10. The difference is 0.16 points. Since 1 point = $10, the profit per contract is 0.16 * $10 = $1.60. For four contracts, the total profit is $1.60 * 4 * 1000 = $640.

Question 19

S&P 400 Midcap (CME) - $500 * Index

$\begin{array}{lcccccccc} 
& & & & & &{\text { Lifetime }} && \text { Open } \
& \text { Open } & \text { High } & \text { Low } & \text { Settle } & \text { Chg } & \text { High } & \text { Low } & \text { Int } \
\text { Mar } & 502.25 & 506.30 & 497.25 & 505.75 & +2.50 & 532.50 & 474.15 & 1,432 \
\text { Apr } & 501.25 & 508.75 & 496.75 & 504.30 & -1.25 & 540.35 & 478.30 & 867
\end{array}$
-You purchased four March S&P Midcap 400 contracts at the lifetime low, and closed your position at the open price of the day. What was your dollar return?

Accepted Answer

First, we need to determine the profit or loss per contract:

Profit/Loss per contract = (Open price - Lifetime low) * $500 per index
Profit/Loss per contract = (502.25 - 474.15) * $500 = $14,050

Since we purchased four contracts, our overall profit would be:

Overall profit = Profit/Loss per contract * Number of contracts
Overall profit = $14,050 * 4 = $56,200

Therefore, the correct answer is B, $56,200.

Question 20

-What is the value of a January silver futures contract at the closing price for the day?

Accepted Answer

The answer of 
-What is the value of a January...

Quiz 16: Futures Contracts

A futures on a stock with a continuous dividend yield of 1.6 percent is currently selling for $93.12. The futures expires in four months, and the risk-free rate of interest is 5.3 percent. What is the current stock price?

-You sold three January silver futures contracts at a quote of 432.8. You closed your position at the opening price of the day. What was your dollar return?

A futures on a stock with six months to expiration is currently selling for $108.32. If the risk-free rate of interest is 5.1 percent, what is the stock price?

A stock is currently selling for $104.12, and has a continuous dividend yield of 1.8 percent. What is the price of a futures contract on the stock that expires in five months if the risk-free rate of interest is 4.5 percent?

A stock is selling for $93.12, and a futures contract on the stock that expires in seven months is selling for $95.27. What is the risk-free rate of interest?

-You purchased eight February silver contracts at the low price for the day, and sold them at the closing price. What was your profit on this transaction?

-What was your dollar return?

A futures contract on as stock is currently selling for $81.87. The contract expires in three months, and the stock is selling for $80.65. What is the risk-free rate of interest?

There is a futures contract on a stock that expires in nine months. The current stock price is $93.12. If the risk-free rate is 6.25 percent, what is the futures price?

A stock is currently selling for $59.76. A futures contract on the stock expires in three months. If the risk-free rate of interest is 4.5 percent, what is the futures price?

There is a futures contract on a stock that expires in 7 months. The stock is currently priced at $78.32, and has a continuous dividend yield of 1.4 percent. If the risk-free rate of interest is 4.9 percent, what is the futures price?

-What is the value of a January silver futures contract at the closing price for the day?