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Please help with these questions. I will leave a thumbs up for any help. Thankyou. Class: Finance Derivatives
On March 1 the spot price of gold is $1900 and the December futures price is $1915. On November 1 the spot price of gold is $1980 and the December futures price is $1981. A gold producer entered into a December futures contract on March 1 to hedge the sale of gold on November 1. It closed out its position on November 1 . What is the effective price received by the producer for the gold ((after taking account of hedging)? 50 points A company enters into a short futures contract to sell 60,000 pounds of cotton for 80 cents per pound. The initial margin is $4,000 and the maintenance margin is $3,000. (a) (10 points) What price of cotton futures will trigger a margin call? (b) (10 points) Suppose 5 days later, the price of the cotton becomes 85 cents per pound, what is the gain or loss for the company
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