1728989
Quiz by Beatriz Peregrina Viñolo, updated more than 1 year ago
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Created by Beatriz Peregrina Viñolo
over 6 years ago
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Description
Question 1
Question
Refer to the table 6.1. What is the approximate annualized lease rate on the 12-month corn forward contract?
Image:
tabla_6.1.PNG (image/PNG)
Answer
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0.00%
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2.25%
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3.92%
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7.84%
Question 2
Question
Refer to the table 6.1. What is the approximate annualized lease rate on the 18-month soybean forward contract?
Image:
tabla_6.1.PNG (image/PNG)
Answer
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0.69%
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1.52%
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2.69%
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3.31%
Question 3
Question
Refer to the table 6.1. If wheat farmers expect a return of 8.0% on their investment in wheat, what is the approximate implied increase in wheat commodity prices over the next 6 months?
Image:
tabla_6.1.PNG (image/PNG)
Answer
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3.75%
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4.59%
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5.26%
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6.37%
Question 4
Question
Refer to the table 6.1. Which of the following terms most accurately describes the forward curve for soybeans over the next two years?
Image:
tabla_6.1.PNG (image/PNG)
Answer
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Contango
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Backwardation
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Contango and backwardation
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None of the above
Question 5
Question
Refer to the table 6.1. Given a lease rate of 7.0% on the 24-month corn forward contract, what is the approximate potential arbitrage profit per contract?
Image:
tabla_6.1.PNG (image/PNG)
Answer
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3.68 cents
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4.48 cents
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5.84 cents
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6.90 cents
Question 6
Question
Refer to the table 6.1. The lease rate on the 6-month soybean contract is 0.35%. What is the implied annual storage cost if the cost is continuously paid and proportional?
Image:
tabla_6.1.PNG (image/PNG)
Answer
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0.84%
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1.62%
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2.30%
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4.0%
Question 7
Question
The spot price of gasoline is 258 cents per gallon and the annualized risk free interest rate is 4.0%. Given a lease rate of 1.0%, a continuously paid storage rate of 0.5%, and a convenience yield of 0.75%, what is the no-arbitrage price range of a 1-year forward contract (in cents)?
Answer
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265.19 to 267.19
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258 to 265.19
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258 to 267.19
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247.16 to 265.19
Question 8
Question
Nine-month gold futures are trading for $1565 per ounce. The spot price is $1509 per ounce. LIBOR during each of the upcoming 4 quarters is listed as 1.04%, 1.22%, 1.30%, and 1.35%, respectively. Calculate the 9-month lease rate on the futures contract.
Answer
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2.4%
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2.1%
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1.3%
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0.0%
Question 9
Question
Forward prices for gold, in dollars per ounce, for the next five years are 1350, 1400, 1560, 1675, and 1756, respectively. A mine can be opened for 3 years at a cost of $2,000. Annual mining costs are a constant $500 and interest rates are 5.0%. When should the mine be opened to maximize NPV?
Answer
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Year 1
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Year 2
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Year 3
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Never
Question 10
Question
The 6-month futures price for oil is $96.60 per barrel (or 2.30 cents per gallon). The 6-month futures prices for gasoline and heating oil are 2.50 cents and 2.15 cents, respectively. What is the gross margin on a simple 3-2-1 crack spread?
Answer
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$0.25
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$0.35
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$0.54
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$0.68
Question 11
Question
The spot price of corn is $5.85 per bushel. The opportunity cost of capital for an investor is 0.5% per month. If storage costs of $0.04 per bushel per month are factored in, all else being equal, what is the likely price of a 4-month forward contract?
Answer
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$5.808
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$5.736
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$5.968
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$6.006
Question 12
Question
The spot price of corn is $5.82 per bushel. The opportunity cost of capital for an investor is 0.6% per month. If storage costs of $0.03 per bushel per month are factored in, all else being equal, what is the future value of storage costs over a 6-month period?
Answer
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$0.1534
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$0.1684
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$0.1772
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$0.1827
Question 13
Question
Oil is selling at a spot price of $42.00 per barrel. Oil can be stored at a cost of $0.42 per barrel per month. The opportunity cost of capital is 7.2% per year (or 0.6% per month). What is the gain or loss realized by an oil refinery that floats its exposure and purchases oil on the spot market in 2 months at a price of $43.00 per barrel, instead of hedging with a forward contract?
Answer
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$0.35 gain
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$0.35 loss
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$1.00 gain
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$1.00 loss