Questions from General Investment

Q: Hillary considers herself a shrewd commodities investor. She bought a May

Hillary considers herself a shrewd commodities investor. She bought a May cotton contract (50,000 pounds) at $0.7744 a pound and later sold it at $0.8104 a pound. What were her profit and her return o...

Q: Not long ago, Vanessa Woods sold her company for several million

Not long ago, Vanessa Woods sold her company for several million dollars. She took some of that money and put it into the stock market. Today Vanessa’s portfolio of blue-chip stocks is worth $3.8 mill...

Q: A quote for a futures contract for British pounds is $1

A quote for a futures contract for British pounds is $1.6683/£. The contract size for British pounds is £62,500. What is the dollar equivalent of this contract?

Q: You have purchased a futures contract for euros. The contract is

You have purchased a futures contract for euros. The contract is for €125,000, and the quote was $1.1636/€. On the delivery date, the exchange quote is $1.1050/€. Assuming you took delivery of the eur...

Q: In late December you decide, for tax purposes, to sell

In late December you decide, for tax purposes, to sell a losing position that you hold in Twitter, which is listed on the NYSE, so that you can capture the loss and use it to offset some capital gains...

Q: An American currency speculator feels strongly that the value of the Canadian

An American currency speculator feels strongly that the value of the Canadian dollar is going to fall relative to the U.S. dollar over the short run. If he wants to profit from these expectations, wha...

Q: With regard to futures options, how much profit would an investor

With regard to futures options, how much profit would an investor make if he or she bought a call option on gold at 7.20 when gold was trading at $482 an ounce, given that the price of gold went up to...

Q: One of the unique features of futures contracts is that they have

One of the unique features of futures contracts is that they have only one source of return—the capital gains that can accrue when price movements have an upward bias. Remember that there are no curre...

Q: You think bitcoin is a fad, and an overvalued one at

You think bitcoin is a fad, and an overvalued one at that. You short three bitcoin futures contracts, each of which has five bitcoins as the underlying asset, at a price of $6,410. A month later the s...

Q: Because of an outbreak of mad cow disease in Britain, you

Because of an outbreak of mad cow disease in Britain, you think that U.S. cattle futures will rise as cattle buyers switch to U.S. suppliers. You act on your belief by purchasing four contracts (50,00...