Cases In Financial Decision-Marking
complete the Q3 and Q4 and i have presentation for this case，do the PowerPoint use key words, and Briefly summarize these two questions and attach a brief speech
Case Study:
Betting on Gold Using a Futures-Based Gold ETF
Suggested Assignment Questions
:
1.
How do gold futures contracts work? Â What are the primary differences between futures
and forward contracts?
2.
Suppose Michelson took a long position (as a speculator) on the December 2012 gold
futures contract on 9/20/2012 and closed it on 10/19/2012. Â Would Michelson have
lost money or made a profit during that period, and would he have received a margin
call? Â Hint: Compute (mark to market) the daily gains/losses over the period.
3.
How are gold futures determined? Â For example, can you make sense of the Dec-12 (GCZ12)
futures price? Â Hint: Â Apply the spot-futures parity equation.
4.
Gold futures prices are typically higher for longer maturities: Â Does that mean that gold
prices are expected to rise? Â Hint: Â Use case Exhibit 6 data to support your argument.
5.
What drives futures gold futures prices outside of demand?
6.
Looking at case Exhibit 3, explain why the futures-based gold ETF (DGL) has a slippage
in returns compared to the physical-based gold ETF (GLD) or gold spot prices? Â Why is
the slippage less than the futures-based oil ETF (USO) relative to crude oil spot prices
in Exhibit 2?
7.
Examine the period from 6/2/2008 to 10/19/2012. Â Assume the DGL follows the roll
Schedule in case Exhibit 12 for DBLCI-OY Gold. Â The GC futures contracts are listed in
case Exhibit 13. Â How much did the roll yield contribute to the DGL returns?
8.
In which ETF would you recommend Michelson invest in order to get exposure to gold:
The DGL or GLD? Â Or would you recommend another option altogether? Â Explain your
reasoning with support point
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