PM Deriv Q re: Return on Futures Contract

I can’t remember the question specifically but I was something like Spot price at initiation 13.50 cost of storage .05 in 270 days Spot price at maturity 14.00? What was the gain on the futures contract? Anybody know?

I think the asswer was .08. Pretty sure it came to 14.08.

I got 13.97. It was like 13.50-.05 (1+RFR)270/365

right - which would have been a gain of .03 but the answers were like a) - .08 b) -.03 c) gain of .27 d) gain of .45 I tought it would have been a gain b/c the spot rose but I did not agree with the two gain amounts. ?

You ADD the storage cost, not subtract.

FP came out as 14.02 … but then I subtracted the .05 / contract cost of storage at maturity Ans I got was B) -0.03 Although think ans s/b A) which was +.08 (not -.08)

I dunno… were we long futures or short?

Long, loss of 8 cents, you add the storage costs.

Think I got -.03 and felt good about it. Don’t really remember though.

yes you get 14.08 for future price and it was long so a loss of 0.08


it was a loss but i can’t remember if it was .08 or .03? needed to multply by 1 + RFR 270/365 right and add the costs? i think it was around -7.6 or something right?

got 0.08 too

kabhii Wrote: ------------------------------------------------------- > yes you get 14.08 for future price and it was long > so a loss of 0.08 I agree- the holding cost was FV so just add it- no need to disc.

right the costs were already discounted.

what was the rfr? I dont remember what I put.

i think the answer was A)

loss .08

loss is .03 storage cost should be added

loss of .08