4. Consider the following market. There are two contracts A and B available. Contract A is priced at $16 today and it delivers 2 gallons of oil and 4 bushels of corn tomorrow. Contract B is priced at $12 today and it delivers 3 gallons of oil and 2 bushels of corn tomorrow. If someone offers a new contract that delivers 12 gallons of oil and 11 bushels of corn tomorrow, what would be the price today of this new contract? A. $50 B. $52 C. $55 D. $57 E. $60

5. Consider a put option written on the Apple Inc. stock that matures 1 month from now. Its strike price is $100 and the current price of Apple Inc. stock is $94. The option is traded at $5.5 today. What are the possible maximum and minimum net profit at maturity of a single short position in this put option, respectively?

   A. $5.5, ?$94.5 B. $6, ?$94
   C. $5.5, $0
   D. $94.5, ?$5.5 E. $0, ?$5.5

6. A crude oil futures price expiring in 9 months from now is $150 while the spot price of crude oil is $145. Assume that the risk-free rate is 5% and storage yield of crude oil is 2%, both in continuously compounded annual terms. What is the implied convenience yield of crude oil in continuously compounded annual terms?

   A. 2.2% B. 2.5% C. 2.7% D. 2.8% E. 3%

Answer rating: 100% (QA)

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