please answer C and D.. 1. a. Calculate the profit for longposition in three contractsof Dec FKLI that was initiallytraded at 1670 and closedwhen FBM KLCI is 1692.b. What is the value of fourcontracts of March 2022FCPO that is currently quotedat RM4100 per metric ton?c. Find the quoted price forFKB3 if the required yield onthe KLIBOR Futures is 4.5%per annum.d. Find the dividend rate if theprice of FKLI contract thatmatures in 3 months isquoted at 1721. FBM KLCI iscurrently quoted at 1713 andthe risk free rate is 3% perannum. Assume all interestrate is simple ratę.

Note : As per the guidelines, only first question will be answered. Kindly post the remaining parts…

Answered: ease answer C and D..

Business

Finance

ease answer C and D..

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Suppose an investor takes a long position in 1 Gold futures contract, and the following information is given: Contract size = 100 ounces. Futures price = $500 Initial margin = $3,000 per contract. Maintenance margin = $2,000 per contract Date Jan. 1 Jan. 2 Jan. 3 Jan. 4 Jan. 5 Jan. 6 Jan. 7 Jan. 8 Future prices 494 495 488 490 491 474 475 474 i) In which days will there be a margin call? How much will be the variation margin in all cases? ii) In which days do the balances in the margin account exceed the initial margin? B) Party A agrees to pay Party B a fixed rate of 4%. Party B agrees to pay Party A a floating rate based on the return of the S&P 500 Index. The payments will be made annually and will be based on a notional principal of $1,000,000. i) Suppose at the end of the first year, the S&P 500 appreciated by 4.5%. How much will Party B will pay Party A II) What will happen in the second year, if the S&P 500 depreciated…
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A company enters into a short futures contract to sell 10,000 units of a commodity for $0.5 per unit. The initial margin is $5000 and the maintenance margin is $3000. When will there be a margin call? Question 1Answer a. As soon as the futures price exceeds $0.7 per unit. b. As soon as the futures price exceeds $0.8 per unit. c. As soon as the futures price exceeds $0.5 per unit. d. As soon as the futures price exceeds $0.6 per unit.
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The common stock of Company XLT and its derivative securities currently trade in the market at the following prices and contract terms: Price ($) Exercise Price ($) Stock XLT $ 21.50 $ - Call Option on Stock XLT $ 5.50 $ 21.00 Put Option on Stock XLT $ 4.50 $ 21.00 Both of these options will expire 91 days from now, and the annualized yield for the 91-day Treasury bill is 3.0 percent. a. Briefly explain how to construct a synthetic Treasury bill position. b. Calculate the annualized yield for the synthetic Treasury bill in part (a) using the market price data provided. c. Describe the arbitrage strategy implied by the difference in yields for the actual and synthetic T-bill positions. Show the net, riskless cash flow you could generate assuming a transaction involving 21 actual T-bills and 100 synthetic T-bills. d. What is the net cash flow of this arbitrage strategy at the option…

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