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Consider a futures contract in which the current futures price is $81. The initial margin requirement is $8, and the maintenance margin requirement is $4. You go long 45 contracts and meet all margin calls but do not withdraw any excess margin. Assume that on the first day, the contract is established at the settlement price, so there is no mark-to-market gain or loss on that day.
i. Complete the table below and provide an explanation of any funds deposited Day Beginning Balance Funds Deposited Futures Price $ Price Change Gain/Loss Ending Balance
0 81 1 84 2 78 3 77 4 76 5 74 6 71 7 82 8 74 9 75 10 66 11 77 12 74 13 82 14 86 15 90 16 80 17 86
ii. Determine the price level that would trigger a margin call.
The treasurer of Company ABC expects to receive a cash inflow of $18,000,000 in 90 days. The treasurer expects short-term interest rates to fall during the next 90 days. To hedge against this risk, the treasurer decides to use an FRA that expires in 90 days and is based on 90-day LIBOR. The FRA is quoted at 6%. At expiration, LIBOR is 4.8%. Assume that the notional principal on the contract is $18,000,000.
i. Indicate whether the treasurer should take a long or short position to hedge interest rate risk.
ii. Using the appropriate terminology, identify the type of FRA used here.
iii. Calculate the gain or loss to Company ABC as a consequence of entering the FRA
The average number of trailer trucks that passed by the South Road Properties in the morning is 60 trucks. What is the probability that exactly 65 trucks will pass by in the following morning?
- Find the measure, to the nearest degree, of the acute central angle in the figure below.
(The radius is 21 and the arc length is 18.)
2 Explain what would happen to the measure of the central angle in the figure aboce if the radius were doubled (and the arc length remained unchanged).
‘Bhartdarshan’ is an Internet-based travel agency wherein customers can see videos of the
cities they plan to visit. The number of hits daily is a normally distributed random variable
with a mean of 10,000 and a standard deviation of 2,400.
a. What is the probability of getting more than 12,000 hits?
b. What is the probability of getting fewer than 9,000 hits?
The treasurer of Company ABC expects to receive a cash inflow of $18,000,000 in 90 days. The treasurer expects short-term interest rates to fall during the next 90 days. To hedge against this risk, the treasurer decides to use an FRA that expires in 90 days and is based on 90-day LIBOR. The FRA is quoted at 6%. At expiration, LIBOR is 4.8%. Assume that the notional principal on the contract is $18,000,000. i. Indicate whether the treasurer should take a long or short position to hedge interest rate risk. ii. Using the appropriate terminology, identify the type of FRA used here. iii. Calculate the gain or loss to Company ABC as a consequence of entering the FRA
3. A small home business set up with an investment of $ 10,000 for equipment. The business manufactures a product at a cost of br. 0.64 per unit. If the product sales for Br. 1.20 per unit how many units must be sold before the business breaks even?
Find the Maclaurin series for the function"f(x)=\\sqrt{(x^2+2-x)^5}"and its radius of convergence.
A researcher claims that adult hogs fed a special diet will have an average weight of 200 pounds. A sample of 10 hogs has an average weight 198.2 pounds and standard deviation of 3.3 pounds. At a= 0.05, can the claim be rejected? Also, find the 95% confidence interval of the true mean?
4. A retail co. plans to work on a margin of 54% of retail price & to incur other Variable Cost of 4%. If is expected fixed cost of Br. 40,000.
i. Find the equation relating Total Cost to sales
ii. Find the profit if sales are Br. 80,000
iii. Find the breakeven revenue
iv. If profit is Br. 20,000 what should be the revenue level?
v. If you have any one item at a price of Br. 20/unit how do you convert the cost equation in terms of revenue in to a cost equation in terms of quantity?
