Answer the following problem from subject derivatives

Problem $1\mathrm{.}1.$

What is the difference between a long forward position and a short forward position?

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Problem $1\mathrm{.}2.$

Explain carefully the difference between hedging, speculation, and arbitrage.

Problem $1\mathrm{.}3.$

What is the difference between entering into a long forward contract when the forward price is $$50$ and taking a long position in a call option with a strike price of $$50?$

Problem $1\mathrm{.}4.$

Explain carefully the difference between selling a call option and buying a put option.

Problem $1\mathrm{.}5.$

An investor enters into a short forward contract to sell $100,000$ British pounds for U$.$S$.$dollars at an exchange rate of $1\mathrm{.}5000$ U$.$S$.$ dollars per pound. How much does the investor gain or lose if the exchange rate at the end of the contract is $($a$)1\mathrm{.}4900$ and $($b$)1\mathrm{.}5200?$

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Problem $2\mathrm{.}1.$

Distinguish between the terms open interest and trading volume.

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Problem $2\mathrm{.}2.$

What is the difference between a local and a futures commission merchant?

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Problem $2\mathrm{.}3.$

Suppose that you enter into a short futures contract to sell July silver for $$17\mathrm{.}20$ per ounce. The size of the contract is $5,000$ ounces. The initial margin is $$4,000,$ and the maintenance margin is $$3,000.$ What change in the futures price will lead to a margin call? What happens if you do not meet the margin call?

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Problem $2\mathrm{.}4.$

Suppose that in September $2018$ a company takes a long position in a contract on May $2019$ crude oil futures. It closes out its position in March $2019.$ The futures price $($per barrel$)$ is $$48\mathrm{.}30$ when it enters into the contract, $$50\mathrm{.}50$ when it closes out its position, and $$49\mathrm{.}10$ at the end of December $2018.$ One contract is for the delivery of $1,000$ barrels. What is the company$$s total profit? When is it realized? How is it taxed if it is $($a$)$ a hedger and $($b$)$ a speculator? Assume that the company has a December $31$ year$-$end.