Futures contract Study guides, Revision notes & Summaries

RSK4805 Assignment 3 2023 (ANSWERS) Question 1 (25 marks) 1.1 An analyst for LevelUP gathered the following information regarding a futures contract: • Current spot-market price of R60 • The continuous compounded risk-free interest rate of 8.5% per annum • The actual futures prices of the contract are R61 Calculate the price of the future contract for delivery in six months and indicate whether the contract is overpriced, underpriced, or correctly priced. (6) 1.2 The gamm...

QUESTION 1 No person may carry on a regulated activity in the UK unless authorised or exempt (s19 FSMA). Need to ensure that the firm is not committing a criminal offence by carrying out a regulated activity without authority pursuant to S 23 FSMA, so we need to consider the effect of FSMA. 1. Are you in Business? a. For an activity to be a regulated activity under FSMA, it must be “carried on by way of business”. As the firm is providing a service for the client, it is in business for...

QUESTION 1A – FSMA REGULATIONS No person may carry on a regulated activity in the UK unless authorised or exempt (s19 FSMA). Need to ensure that the firm is not committing a criminal offence by carrying out a regulated activity without authority pursuant to S 23 FSMA, so we need to consider the effect of FSMA. 1. Are you in Business? a. For an activity to be a regulated activity under FSMA, it must be “carried on by way of business”. As the firm is providing a service for the client,...

In this document, you'll find an extensive summary for the course Derivative Instruments. The summary contains the most important information from the book, including all the relevant formulas and tables/figures from the book.

FIN2601 Assignment 1 (QUIZ ANSWERS & CALCULATIONS) Semester 1 2024 - DUE 10 April Which of the following increases basis risk? - ANS-A large difference between the futures prices when the hedge is put in place and when it is closed out *Dissimilarity between the underlying asset of the futures contract and the hedger's exposure* A reduction in the time between the date when the futures contract is closed and its delivery month None of the above Which of the following is NOT tr...

FUTURES FINAL EXAM ACTUAL QUESTIONS AND ANSWERS ALREADY GRADED A+ A trader who is long 5 corn futures contract (5,000 bushels per contract) at $4.20 offsets her position at $4.45. Assuming commission is $50 per contract per round turn, what is her gain or loss on the trade? Ans- Gain of $6,000 Market Orders to sell futures contracts are matched against the best or highest limit order bids Ans- True Hedging margin is set at the same level as a speculator's Ans- maintenance margin...

FUTURES & OPTIONS FINAL EXAM 2024 ACTUAL QUESTIONS AND ANSWERS WITH COMPLETE SOLUTION how is a long hedge implemented? Ans- buy futures at beginning of hedge period and then sell futures at end of hedge period when the input is purchased in the cash market. True or false. a very high stock-to-use number is typically associated with higher cash prices Ans- false to "lock in" a profit margin, a cattle feedlot operator should: Ans- buy corn futures, buy feeder cattle futures and...

CFA Level 1 - 101 Must Knows 368 Questions with Verified Answers Addition Rule of Probability - CORRECT ANSWER ADDITION: P(A or B) = P(A) + P(B) - P(AB) Roy's Safety First Criterion - CORRECT ANSWER Safety First Ratio = (E(R) - Rₜ) / σ Larger ratio is better If (Rₜ) is risk free rate, then it becomes Sharpe Ratio Sharpe Ratio - CORRECT ANSWER Sharpe Ratio = (E(R) - RFR) / σ Larger ratio is better If (Rt) is higher than RFR, then it becomes Safety First Ratio Centra...

Conduct and Practices Handbook (CPH) Exam 136 Questions with Answers Duty of care - CORRECT ANSWER This refers to obligation #3 of registered representative (RR) about acting honestly, in good faith, and in a professional manner. This is a requirement to provide advice to clients with those attributes in mind along with the proper skills and knowledge to do so. It is important to note that the standard of care provided is not a standard of perfection. RRs are usually held to this standard muc...

Test Bank for Intermediate Accounting, Volume 2 5e 5th edition by Kin Lo, George Fisher. ISBN-13: 4919 Full Chapters test bank included for Vol 2 Chapter 11 Current Liabilities, Non-Financial Liabilities, and Contingencies A. Introduction B. Definition, Classification, and Measurement of Liabilities 1. Liabilities defined 2. Recognition 3. Financial and non-financial liabilities 4. Current versus non-current liabilities 5. Initial and subsequent measurement C. Current Liabilities ...