FIXING INSTRUMENTS AND OPTIONS

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.

X buys futures contract and Y sells a futures contract. Neither have previously transacted in futures,. Initial margin is payable by:

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.

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:

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?

It is true that financial futures contracts:

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:

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

Under a financial put option

An American put option gives the holder the right:

Which of the following instruments would be LEAST likely to be used by a small treasury department?

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:

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