PROBLEM 32-12

LETTER/ANSWER
B Question 1
notional figure= 8000
notional val = 8000 kls
fixed price= 1200

(8000 x 1200)
8,000 x 1,200 = 9,600,000

C Question 2

Market price - Dec. 31/15 1500

Underlying fixed price 1200
Derivative asset 300

Forward contract receivable (8,000 x 300) 2,400,000

Present value of derivative asset (2,400,000 x .91)

B Question 3

Market price - Dec. 31/16 1000

Underlying fixed price 1200
Derivative liability 200

Forward contract receivable (8,000 x 200) 1,600,000

2,184,000
 PROBLEM 32-13
LETTER/ANSWER
A Question 1

Market price - Dec. 31/15

Underlying strike price
Derivative asset

Call option (50000x10)

Payment for call option
Unrealized gain -OCI

A Question 2

Market price - July 1, 2016

Underlying strike price
Derivative asset

Call option - 7/1/16 (50,000x15)

C Question 3

Market price - 7/1/16 (50,000x115)

Cumulative unrealized gain (450,000+250,000)
Cost of purchases

Call option 7/1

Call option 12/31/15
 110
100
10

500,000
(50,000)
450,000

115
100
15

750,000

5,750,000
(700,000)
5,050,000

750,000
500,000
250,000
 PROBLEM 32-14

LETTER/ANSWER
A Question 1

Market price - Dec. 31/17

Underlying strike price
Derivative asset

Call option (200,000x3)

Payment for call option
Unrealized gain -OCI

A Question 2

The loss on call option is equal only to the payment of 20,000.

A Question 3

Market price - 7/1/18

Underlying strike price
Derivative liability

200,000 x 4 800,000

B Question 4

Market price - 7/1/18 (200,000x21)

Unrealized loss (800,000-20,000)
Cost of purchases
 28
25
3

600,000
(20,000)
580,000

the payment of 20,000.

21
25
4

4,200,000
780,000
4,980,000