In February, a corporate wishes to fix the price of wheat required for three months' time. The corporate purchases 100 May wheat futures contracts at US $794.0 and sells them again in May for US$ 854.00. An initial margin of US$50.00 was paid on each contract. What was the net total amount paid or received by the corporate on closure of the contracts in May? Assume an profit or loss on these contracts is settled in full on close out.
pay $1,000
pay $5,000
pay $6,000
receive $5,000
receive $6,000
receive $11,000
X buys futures contract and Y sells a futures contract. Neither have previously transacted in futures,. Initial margin is payable by:
Both X and Y
X only
Y only
Neither X nor Y
4 Platinum futures contracts, each for 50 ounces, were sold at 920.1 per ounce and closed out one month (30 days) later at 935.9. What is the best estimate of the total value variation margin on the deal? The total value of the variation margin is the total net gain or loss on the futures contracts.
3,160 received
63,20 received
15.80 paid or received
6,320 paid
3,150 paid
A company has a floating-for-fixed swap with net settlement every 6 months. The net settlement paid on 1 January 2009 is calculated using 6-moth LIBOR set on:
1 January 2008
1 July 2008
1 January 2009
1 July 2009
1st January X8: Company AB borrows £100,000 under a 5-year bank loan linked to 6-month LIBOR plus 50 basis points. 1st January X8: 5 year semi-annual fixed rate swap rate is 6% against 6-month LIBOR Outturn 6 month LIBOR rates were as follows 1st January X8 5.0% 1st July X8 5.5% 1st January 6.1% Assume that company AB enters into a 5 year £100,000 fixed for floating swap on 1st January. What is the net payment or receipt under the swap contract on 1st July X8?
Pay £250
Pay £500
Receive £250
Receive £500
Receive £750
It is true that financial futures contracts:
are normally held to delivery
require an initial margin to protect the company against clearing house counterparty risk
can be tailored to a customer specific delivery date, but are over fixed contract amounts
are transparently priced
A coffee importer buys a call option over 10,000 kg of coffee at a price of USD 2.68 per kg for a premium of USD 0.25 per kg. On expiry the market price for coffee is USD 2.50 per kg, the company should:
exercise the option sand relies a profit
exercise the option sand relies a loss
take delivery of the coffee under the option contract
let the option lapse and buy the coffee on the open market
A UK food manufacture buys 200,000 liters of soys oil at USD 0.18 per litre with payment due in nine months's time and enters into a nice month forward contract to purchase USD at GBP/USD 2.1500. The best estimate of the hedged GBP c pst of the soys oil is
17,000
36,000
52,000
77,000
Under a financial put option
the buyer has the right to buy and the writer has the obligation to buy
the buyer has the right but not the obligation to to buy and the writer has the obligation to sell
the buyer has the right to sell and the writer has the obligation to buy
the seller has the right but not the obligation to to sell and the writer has the obligation to sell
An American put option gives the holder the right:
to buy the physical on a certain date for a certain price
to sell the physical on a certain date for a certain price
to buy the physical at any time up to expiry date for certain price
to sell the physical at any time up to expiry date for certain price
Which of the following instruments would be LEAST likely to be used by a small treasury department?
forward contract
FRA
currency futures
currency options
interest rate swap
A single 1 month option over 100,000 A plc shares, with a strike price of EUR 1.20 per share, is issued at a premium. The best estimate of the maximum loss to the option writer under this option is:
EUR 73,333
EUR 83,333
EUR 110,000
EUR 120,000
Unlimited loss
40 Futures contracts were purchased at a unit price of 295 and initial margin of 50 per count act., they were sold 7 days later at a unit price of 333. the best estimate of the profit or loss on this transaction is
3,520 profit
1,520 profit
38 profit
38 loss
1,520 loss
3,520 loss
1520 loss
