Reference no: EM131005291
1. Assume all rates are annualized with semi-annual compounding. Please be explicit about how you derive your results and round to four decimals after the comma.
(Part I) At time 0, Investor A enters into a forward contract, at no cost, to buy, at time 2, $100,000 par of a zero maturing at time 3. The forward price this investor locks in to pay at time 2 is $91,000.
a. What forward rate does this investor lock in at time 0, through this forward contract, for lending from time 2 to time 3?
(Part II) At time 1, the spot price of $1 par of a zero maturing at time 2 is 0.95 and the spot price of $1 par of a zero maturing at time 3 is 0.91.
a. At time 1, what is the forward price an investor could lock in to pay, at time 2, for $100,000 par of a zero maturing at time 3?
b. What is the value, at time 1, of Investor A's position in the forward contract from Part I?
|
Annual lease payments beginning january
: Collectibility of the lease payments by the lessor was reasonably predictable and there were no costs to the lessor that were yet to be incurred.
|
|
Period of growing competition
: The industry of mobile phones is experiencing a period of growing competition that erodes the profit margin and that is killing many competitors. In the last five years the field has become an oligopolistic market with room for a very limited numb..
|
|
Find the fluid force on vertical plate submerged in water
: Find the fluid force on the vertical plate submerged in water, where the dimensions b = and a = 5 are given in meters and the weight density of water is 9800 newtons per cubic meter.
|
|
Pair each item from list a with the item from list b
: Listed below are several terms and phrases associated with leases. Pair each item from List A with the item from List B (by letter) that is most appropriately associated with it.
|
|
Annualized with semi-annual compounding
: 1. Assume all rates are annualized with semi-annual compounding. Please be explicit about how you derive your results and round to four decimals after the comma.
|
|
How does the evolution of native american religions serve
: How does the evolution of Native American religions serve as a microcosm for the religious adaptations that other immigrant groups would later make? Please be specific.
|
|
Determine the costs of preference shares
: Flotation costs are expected to be 5 per cent; these costs can be amortized for tax purpose during 8 years at a uniform rate. The corporate tax rate is 35 per cent. Determine the costs of preference shares from the perspective of the subsidiary
|
|
Units of a tools component
: Master Tools Ltd. Is currently operating its business at 75% level, producing 38275 units of a tools component and proposes to increase capacity utilization in the coming year by 33 1/3 % over the existing level of production.
|
|
Signal immediately leased the plane back
: The lease requires Signal to make payments of $102,771 to the finance company each January 1. Signal depreciates assets on a straight-line basis. The lease has an implicit rate of 11%.
|