Derivative Securities
I. Select a commodity for which futures contracts exist and a futures contract on that commodity with an expiration date between 3 and 9 months from now.
a. Find the price of the oorrunodity and the sertkaat price for the futures contract for the start date and for one week after the start date.
b. Determine the one-week return (both dollar and percentage) on an investment in the commodity itself and on the long and short futures contract (For the futures contract, use the initial margin as the amount Invested.)
2. Select a stock or stock index for which options exist Select an option expiration date between 6 and 9 maths from now.
a. Find the closing once of the stock and the last" prices for (0 the call option expiring on the expiration dace with a strike price just greater than that closing price and (ii) the put option expiring on the expiration date with a stake price just less than that closing price.
b. Find the closing price of the stock and the 'last" prices on the all and put options one week after the start date.
c. Determine: I. the one-week return (both Ilona/ and percentage) on the stock
ii. the one-week return (both dollar and percentage) on the call and put options based on the last price in b.
III. the return (both dollar and percentage) on the call and put options if on the date the option expires the stock once is the same as the closing price in b.