Calculate the Profit or Loss Achieved by a Speculative Investment

question 74

Essay

Calculate the profit or loss achieved by a speculative investment in 10 March BAB futures contracts given the position was opened by buying the contracts at a price of 96.7 and later closed-out at a price of 96.9.

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Definitions:

Binomial Probability

The probability of obtaining a fixed number of successful outcomes in a fixed number of trials, each with the same probability of success.

Logistic Regression

A statistical method for analyzing a dataset in which there are one or more independent variables that determine an outcome. The outcome is measured with a dichotomous variable (where there are only two possible outcomes).

Lactic Acid

An organic compound produced in muscles during intense activity and fermented foods, responsible for the sour taste.

Confidence Interval

A statistical measure expressed as an interval, calculated from sample data, indicating where the true population parameter is expected to lie with a specific degree of certainty.