i attempted examples on this chapter, reference example 4:
1)
number of contracts are 80, had used 40. is t because the standardized contracts are for 3 months, so we need the number of contracts for our 6 months effectively?
2)
profit on futures......where do we get the 400 denominator. lost!
likewise on example 6, the 2 questions apply
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interest rate option-chapter 20
10y ago#1Have you watched the lectures (because the notes are to be used with the free lectures, not on their own)? I do explain both things in the lectures.
The futures are three month futures and therefore to protect for 6 months we need to multiply the contracts by 6/3
The 400 is because we divide by 100 because they are effectively %'s and we divide by 4 because they are three month futures (and there are 4 three months in a year).
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