Arbitrage trade-profit using the price you were quoted

Assignment Help Financial Management
Reference no: EM132073518

The current spot price of gold is $1,315 per ounce. The 11-month risk free rate is 0.75% (annualized, continuously compounded). Your broker quotes you an 11-month futures contract at $1,391. Assume storage costs are $0.23 monthly per ounce, paid at the end of the storage period. What is the correct theoretical futures price? What is the arbitrage trade/profit using the price you were quoted?

Reference no: EM132073518

Questions Cloud

Balance in retained earnings for night scapes : What is the year-end 2008 balance in retained earnings for Night Scapes?
Baby boomer generation : Which of the following is true of the baby boomer generation?
Formula for calculating the debt-assets ratio : Based on the above figures and the formula for calculating the debt-assets ratio found on the Help screen for p. 5 of the Footwear Industry Report
What is your interpretation of the company revenues : What information do you think that you might have access to, as a manager of the firm, that an outsider would not? What is your interpretation of the company's?
Arbitrage trade-profit using the price you were quoted : What is the correct theoretical futures price? What is the arbitrage trade/profit using the price you were quoted?
Solve the differential equation : Solve the differential equation y' = x + y
Calculate the present value of the corporate bonds : The Reuth Corporation plans to issue $20,000,000 of 10-year bonds at par next June, with semiannual interest payments. The company's current cost of debt.
What is the proportion invested in each of two risky funds : What is the standard deviation of your portfolio? What is the proportion invested in each of the two risky funds?
Describe three advantages of green it : With a focus on enterprise hardware, software, services, and human capital, list and describe three advantages of green IT.

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd