If KLSE-CI futures (i.e. FKLI) are at 1160, the cash price (KLSE-CI) is 1155, and the fair

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If KLSE-CI futures (i.e. FKLI) are at 1160, the cash price (KLSE-CI) is 1155, and the fair value (intrinsic) price for futures is 1157, what is the basis?

SHOW calculation.

2. As a speculator, if F < F*, should I buy or sell futures contract?

3. What can you learn from the Allied Irish Bank mishap due to derivatives usage? Briefly explain in a paragraph or two.

Related Book For answer-question

Intermediate Accounting

ISBN: 978-0132162302

1st edition

Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella

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Posted Date: Mar 17, 2023 04:24 AM

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If KLSE-CI futures (i.e. FKLI) are at 1160, the cash price (KLSE-CI) is 1155, and the fair

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1 The basis is the difference between the cash price KLSECI and the fair value intrinsic price for f... View the full answer

Intermediate Accounting

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