User Account

All Pages

Calculate the forward price

Assignment Help Finance Basics
Reference no: EM132376851

The current spot price of a non-dividend paying stock is $65, while the simple interest rate is 4.50 percent per year. Consider a forward contract written on this stock with a maturity of 90 days.

a) Calculate the forward price.

b) What is the value of the contract?

c) General Electric wants a 90-day forward contract with the delivery price set at $60. What is the value of this contract?

Reference no: EM132376851

Questions Cloud

Explain the two causes of liquidity risk : What are two ways a depository institution can offset the effects of asset-side liquidity risk such as the drawing down of a loan commitment? Explain.
Two simple models to measure credit risk concentration : Explain the two simple models to measure credit risk concentration in the loan portfolio: migration analysis and concentration limits.
How given might impact your role in promoting social change : Consider how the Triple Bottom Line is related to and affected by an organization's performance. Reflect on the meaning of corporate social responsibility.
Create an AMPL model that used as a tool to find the cost : GRA 62273 Business Optimisation Assignment - Create an AMPL model that can be used as a tool to find the cost optimal supply network design for the company
Calculate the forward price : The current spot price of a non-dividend paying stock is $65, while the simple interest rate is 4.50 percent per year. Consider a forward contract
What is good about the case approach : This course is built on the case format. Share your thoughts and/or feelings about what is good about the case approach, what is "bad" about the case approach.
What is the present value of a annuity paid : What is the present value of a $1,000 annuity paid at the end of each year at an interest rate of 5%
What has been the importance and significance : Cellular respiration and photosynthesis form a critical cycle of energy and matter that supports the continued existence of life on earth.
What was the profit to jp morgan chase : At the end of the contract the spot exchange rate was$1.65 per pound. What was the profit to JP Morgan Chase?

Reviews

Write a Review

Finance Basics Questions & Answers

  Explain why governments must use technology

Explain why governments must use technology. Explain who should be involved in the needs assessment process.

  The coupon rate on this bond is 8 annually with interest

you have just purchased a 10 year 1000 par value bond. the coupon rate on this bond is 8 annually with interest being

  What is its operating cash flow

Raines Umbrella Corp. had sales of 7Z $850.000. Cost of goods sold. administrative and selling expenses, and depreciation expenses were $610,000, $110,000. and $140.000. respectively. In addition, the company had an interest expense of $85.000 and a ..

  Using the put-call-parity relationship

Using the put-call-parity relationship what is the position that is sure to generate positive profits.

  Common stock-50 par 2000000 shares outstanding- 100000 how

cash- 28000000common stock-50 par 2000000 shares outstanding- 100000additional paid in capital- 10000retained earnings-

  Determine what the dividend payout ratio must be

Constraints on Growth. High Flyer, Inc., wishes to maintain a growth rate of 13 percent per year and a debt-equity ratio of .35.

  Estimate Nike cost of capital

You are provided with a Harvard Case UVA-F-1353: Nike's Cost of Capital. Using the method followed by Joanna Cohen, estimate Nike's cost of capital

  Use the gasoline sales time series data from table to show

use the gasoline sales time series data from table to show the exponential smoothing forecasts using a 0.1. using the

  Salvage value and working capital investment recovery

Do we need to add salvage value and working capital investment recovery to calculate cash flow of year 4?

  Foreign currency hedge-existing receivable

Prepare journal entries to record the receivable from the sales transaction and the forward contract on April 1. Prepare journal entries to record collection of the receivable and settlement of the forward contract on May 30

  How should the budget activities be regulated?

How should the budget activities be regulated?

  What is the purpose and importance of financial analysis

What is the purpose and importance of financial analysis? What are financial ratios? Describe the "five-question approach" to using financial ratios.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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