6. Look at the futures listings for the corn contract in Figure below: Dec 2009

Question

6. Look at the futures listings for the corn contract in Figure below: Dec 2009 3712 1637243776 3686 53150 Mar 2010 3834-14 384 2 389'4 3810 6464 728 1022 184 Dec 2010 41221'24124 4174410 2902 MonthLast Chg Open High Low Volume Open Int 521158 177561 40116 60725 15953 95330 6296 953 May 2010 392'4 -10 3930 397'2 389'6 Jul 2010 400210 4000 405'4 3970 2010 40541'44070 4106 4030 Dec 2011 4186 -0'6 418 6 4230 4172 Dec 2012 | 437-0 | 0'0 | 440'0 | 4400 | 436'? 25 Each contact calls for delivery of 5,000 bushels of corn.Suppose you buy one contract for December 2011 delivery. If the contract closes in December at a level of 4.192, what will your profit be? a. b. How many December 2011 maturity contracts are outstanding?

Explanation / Answer

a) This is pertaining to future contracts or derivatives markets and profits are booked if contract prices > spot prices.

At Dec 2011, sot price closed 4.186 / bushel ( not clear view , hence assuming 4.186) and contract price = 4.192 / bushel

Profit per contract (4.192 - 4.186) x 5000 bushel = 30

---------------------------------------------------------

b) Open interest represents the number of contracts open and the number on 2011, Dec was 6296

Related Questions

Navigate

• Browse (All)
• Browse 6
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.