Share
Explore BrainMass

Future Contracts

Please refer to the attached chart. Suppose you sell nine March 2009 silver futures contracts on February 12, 2009, at the last price of the day.

Question:
(a) What will your profit or loss be if silver prices turn out to be $14.61 per ounce at expiration? Input the amount as positive value. Round your answer to the nearest whole dollar amount. (e.g., 32.))

Net: $_________

(b) What if silver prices are $12.63 per ounce at expiration? Input the amount as positive value. Round your answer to the nearest whole dollar amount. (e.g., 32.))

Net:$___________

Attachments

Solution Preview

Please see the attached file:

Suppose you sell nine March 2009 silver futures contracts on February 12, 2009, at the last price of the day.

Question:

Silver March Contract
Contract Size= 5000 ounce
Closing price= 1351 cents/ounce= $13.51 per ounce
Contracts sold= 9

Since the contracts have been sold, we gain if the price at expiration falls and we lose if the price at ...

Solution Summary

Profit/Loss on silver futures contracts have been calculated.

$2.19