22-104 If the portfolio manager put on the hedge in question 102 (89-00/32nds),what is the profit/loss on the futures position given the settlement price in question 103 (81-27/32nds)?
A)Profit of $2,146,875.
B)Loss of $2,146,875.
C)Profit of $1,270,000.
D)Loss of $1,270,000.
E)Loss of $812,700.

Question

Quizplus · Accepted Answer

The initial futures price was 89-00/32nds and the settlement price was 81-27/32nds. The difference is 7-05/32nds, which translates to a profit of $2,146,875 when considering the standard contract size.

22-104 If the Portfolio Manager Put on the Hedge in Question