Question IV A company has a stock of 200 ounces of gold. The gold quote on...
Fantastic news! We've Found the answer you've been seeking!
Transcribed Image Text:
Question IV A company has a stock of 200 ounces of gold. The gold quote on 1/10/N is $1.730/ounce. Fearing the devaluation of the stock until December that year the company decides to cover its risk using gold futures contracts for December. These contracts are negotiated in the New York Mercantile Exchange. Each contract represents 100 ounces of gold. On the first of October it orders its broker to sell two futures contracts with expiry in December of year N. The price of sale in 1 October is $1.720/ounce. Contrary to the plan, the company closes its futures position on the fourth of October of year N, buying two futures contracts. In the following table you will find the daily prices: Date 1/10 2/10 3/10 4/10 $/ounce 1.720 1.719 1.722 1.725 Request: Calculate the daily and accumulated gains and losses. Question IV A company has a stock of 200 ounces of gold. The gold quote on 1/10/N is $1.730/ounce. Fearing the devaluation of the stock until December that year the company decides to cover its risk using gold futures contracts for December. These contracts are negotiated in the New York Mercantile Exchange. Each contract represents 100 ounces of gold. On the first of October it orders its broker to sell two futures contracts with expiry in December of year N. The price of sale in 1 October is $1.720/ounce. Contrary to the plan, the company closes its futures position on the fourth of October of year N, buying two futures contracts. In the following table you will find the daily prices: Date 1/10 2/10 3/10 4/10 $/ounce 1.720 1.719 1.722 1.725 Request: Calculate the daily and accumulated gains and losses.
Expert Answer:
Related Book For
Elementary Statistics A step by step approach
ISBN: 978-0073386102
8th edition
Authors: Allan Bluman
Posted Date:
Students also viewed these finance questions
-
The World Series consists of a sequence of at most seven games that terminates when one team wins its fourth game. Suppose that the stronger team (the favorite) has probability p (where p > 1/2) of...
-
The graphs of f and t are given. (a) State the values of f (4) and g (3). (b) For what values of x is f (x) = g(x)? (c) Estimate the solution of the equation f (x) = 1. (d) On what interval is f...
-
The graph of f is given. Draw the graphs of the following functions. (a) y = f (x + 4) (b) y = f (x) + 4 (c) y = 2f(x) (d) y = -½(x) + 3
-
What are the side effects of the drugs that are used for treatment of Multiple Sclerosis attacks? Are cataracts a result of steroid use? Is osteoporosis a complication of Multiple Sclerosis?
-
Refer to the financial statements of Abercrombie & Fitch and Aeropostale that are supplied with this text. Required: 1. Both Abercrombie & Fitch (Note 14) and Aeropostale (Note 14) have notes that...
-
Leroy Landry, the accountant for Louies Laundry, unfortunately left the companys second quarter budget folded in his shirt pocket when his wife Lola washed his clothes. Finding bits of paper in the...
-
Which statement is false with respect to Section 404 of SOX? a. The section requires management's assessment of internal control over financial reporting. b. The auditor's report on internal control...
-
(Conversion of Bonds) The December 31, 2010, balance sheet of Osygus Corp. is as follows. 10% callable, convertible bonds payable (semiannual interest dates April 30 and October 31; convertible into...
-
objective function and the constraint. 1:The Flair Furniture Company produces inexpensive tables and chairs. The production process for each is similar in that both requires a certain number of hours...
-
Blossom Corporation is preparing the comparative financial statements to be included in the annual report to stockholders. Blossom employs a fiscal year ending May 31. Income from operations before...
-
A small business owner visits her bank to ask for a loan. The owner states that she can repay a loan at $2,100 per month for the next three years and then $4200 per month for two years after that. If...
-
ALWD citation for: Ma. Code Ann. 16-8-7 (2023) Everette v. State, 321 Ma. 466 (2010) 705 S.E.2d 248 Robert Greene v. State, 331 Ma. 88 (2010) 771 S.E.2d 563 Gillis v. State, 276 Ma.App. 802 (2012)...
-
Some selected sales and cost data for job order213Jojare given below. Direct materials used $200,000 Direct labor 300,000 Factory overhead (all indirect, 40%variable) 150,000 Selling and...
-
You are sales director of a fast growing start up company. At the end of 2019, you had a team of five salespeople who sell your water quality monitoring equipment. All five sales people had been...
-
The following data relates to the Washington Co.: Direct Materials Inventory, Beginning $300 Direct Materials Inventory, Ending $250 Direct Materials Purchases $2,100 Direct Labor $1,300...
-
Young Manufacturing Company produces the following three products: Selling price per unit Variable costs per unit Contribution per unit Fixed costs are $76,500 per year. Hammers Screwdrivers Saws $47...
-
Discuss four characteristics of a traditional index fund (TIF). (according to John Bogle's book, pages XVII and XVIII of the Introduction) Why are ETFs different from a traditional index fund? What...
-
Use of the contraceptive Depo Provera appears to triple women's risk of infection with chlamydia and gonorrhea , a study reports today. An estimated 20 million to 30 million women worldwide use Depo...
-
P (1.12 < z < 1.43) Find the probabilities for each, using the standard normal distribution.
-
Is the size of the population by age related to the state that its in? Use = 0.05. (Population values are in thousands.) Perform the following steps. a. State the hypotheses and identify the claim....
-
A survey was targeted at determining if educational attainment affected Internet use. Randomly selected shoppers at a busy mall were asked if they used the Internet and their highest level of...
-
7. ETHICS Jane says to Cody, "If you will agree to work as my yard man, I'll pay you $1,000 per week for a normal work week. You can start on Monday, and I'll guarantee you eight months' work." Cody...
-
8. Ronald Armstead worked for First American Bank as a courier. His duties included making deliveries between the bank's branches in Washington, D.C. Armstead parked the bank's station wagon near the...
-
9. YOU BE THE JUDGE WRITING PROBLEM Eileen Murphy often cared for her elderly neighbor, Thomas Kenney. He paid her $25 per day for her help and once gave her a bank certificate of deposit worth...
Study smarter with the SolutionInn App