Describe each employee economic status

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1. What is the annual income of three employees working 40 hours a week, earning $5.15, $7.25, $15.00 per hour? Using income guidelines for the state of Georgia, how would you describe each employee’s economic status? How does each annual salary compare to federal poverty guidelines?

2. Suppose that there is a forward contract on a non-dividend paying stock. The spot price of the stock is $80, and it would be either $85 or $78 in the next time period. The forward price is $83. The risk-free interest rate is constant at 5%. a. What is the value of the forward contract? b. Given the answer to (a), is there an arbitrage opportunity available? c. If there is an arbitrage opportunity, provide a strategy to exploit the arbitrage.

Reference no: EM131915086

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