futures price is $820 per ounce. How many contracts do you need to purchase? How much will you pay for your platinum? What is your dollar profit if platinum sells for $870 a troy ounce when the futures contract expires? What if the price is $770 at expiration?

futures price is $820 per ounce. How many contracts do you need to purchase? How much will you pay for your platinum? What is your dollar profit if platinum sells for $870 a troy ounce when the futures contract expires? What if the price is $770 at expiration?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

The contract size for platinum futures is 50 troy ounces. Suppose you need 450 troy ounces of platinum and the current
futures price is $820 per ounce. How many contracts do you need to purchase? How much will you pay for your
platinum? What is your dollar profit if platinum sells for $870 a troy ounce when the futures contract expires? What if the
price is $770 at expiration?

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