Please help with these questions. I will leave a thumbs up for any help. Thankyou....
60.1K
Verified Solution
Link Copied!
Question
Finance
Please help with these questions. I will leave a thumbs up for any help. Thankyou. Class: Finance Derivatives
On March 1 the spot price of gold is $1900 and the December futures price is $1915. On November 1 the spot price of gold is $1980 and the December futures price is $1981. A gold producer entered into a December futures contract on March 1 to hedge the sale of gold on November 1. It closed out its position on November 1 . What is the effective price received by the producer for the gold ((after taking account of hedging)? 50 points A company enters into a short futures contract to sell 60,000 pounds of cotton for 80 cents per pound. The initial margin is $4,000 and the maintenance margin is $3,000. (a) (10 points) What price of cotton futures will trigger a margin call? (b) (10 points) Suppose 5 days later, the price of the cotton becomes 85 cents per pound, what is the gain or loss for the company
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
