A call option has a strike price of 70 in dollars, and a time to expiration
of 0.7 in years. If the stock is trading for 43 dollars, N(d1) = 0.5, N(d2) = 0.4, and the risk free rate is0.03, what is the value of the call option?
Formula: C= S*N(d1) – X*N(d2)*e^(-rt)
Which of the following statements is an example of Contango? More than one answer is possible.
A) The current futures price of oil for delivery in six months is $60/barrel. The current spot price of oil is $50/barrel.
B) The current futures price of oil for delivery in six months is $60/barrel. The current spot price of oil is $70/barrel.
C) As the expiration date of a future contract on gold approaches, the future price decreases, but the spot price remains the same.
D) As the expiration date of a future contract on gold approaches, the future price increases, but the spot price remains the same.
Assume that Gold had a price on day zero of $2,100/ounce and that
both the short and long futures position initially were required to post a margin of $4,500. On day one the price of gold changes to $2,100. What is new value of the long futures margin account?
Oscar Inc. has inventory in Japan valued at 39,051,000 Yen one year
ago. One year ago the exchange rate for dollars to yen was 1 yen = $0.0163. Today the exchange rate is 1 yen = $0.0154. Assuming the value of the inventory does not change, what is the gain or loss in the value of the inventory in U.S. dollars as a result of the change in exchange rates?
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