Calculate the rate of return in percentage

Assignment Help Financial Management

Reference no: EM13811540

1) An investor takes a long position of 10 gold futures contract. The contract size is 100 ounces. The gold futures price is $1,500 per ounce and the initial margin is $60 per ounce.

Suppose the futures price becomes $1,523 next month and he sells to close the futures. Calculate the rate of return in percentage up to 2 decimal points such as 12.34%.

2) A bank wants to lock in the 3-month interest rate starting on June 20, 2017. Currently, 6/2017 Eurodollar futures price is 94.51 and 9/2017 Eurodollar futures price is 97.55. What is the lock in 3-month interest rate between 6/2017 and 9/2017? (Margin of error: +/- 0.01%)

3) A long forward contract and a long futures contract have the same cash flow.

True

False

4) Calculate the present value of $100 in 3 years using 6.8% interest rate with continuous compounding.

Reference no: EM13811540

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