Determination of futures prices

Assignment Help Financial Management
Reference no: EM131874117

Determination of Futures Prices

Suppose that a stock X is selling for $87.50. But you want to buy the stock in 3 months when you will have the money. If the interest rate is 4%, what do you think should be the fair value of the stock futures contract?

Determination of Futures Prices

Supposes that a stock X will pay a $10 dividend in 2 months and then another $10 three months afterward. How much do you think you would pay for the stock futures contract, which will mature in 8 months? Assume that the interest rate is 5%.

Reference no: EM131874117

Questions Cloud

Find the x-coordinate for point : She knows that the distance between the x-coordinates is 3 units. Which of the following fractions will let her find the x-coordinate for point C?
Develop a simple linear regression analysis : Develop a simple linear regression analysis between Finley Heaters' sales and national housing starts. Forecast Finley Heaters' sales for the next two years.
Closing price of the toy company stock : What was the closing price of each stock on that? day?
Discusses the length of the coverage : Compose an essay to distinguish when an employee is covered by Workers' Compensation or covered by private/public health insurance.
Determination of futures prices : If the interest rate is 4%, what do you think should be the fair value of the stock futures contract?
What is yield to maturity and expected capital gains yield : What is the yield to maturity? what is the expected current yield? what is the expected capital gains yield?
Determine the total discount or premium for each issue : The initial proceeds per bond, the size of the issue, the initial maturity of the bond, Determine the total discount or premium for each issue
What are the terms that appear in the partial products : What are the terms that appear in the partial products algorithm for 127x32, and what products to you compute to obtain those terms?
Describe at least three specific details or elements : Identify and describe at least 3 specific details or elements that progressively illustrate the artist's concern for depicting a more natural world.

Reviews

Write a Review

Financial Management Questions & Answers

  What is the standard deviation of the bond fund returns

There are three states of the economy: Low, Medium, and High, with probabilities 25%(Low), What is the standard deviation of the bond fund's returns?

  What was the annual percentage increase in the winner check

What was the annual percentage increase in the winner’s check over this period?

  Higher offers raise costs

Higher offers raise costs: Opposing view While the deplorable incident on United didn’t involve an airline selling more seats than were available on the plane.

  Calculate the price at which investor will get margin call

In one year the investor gets a margin call. Calculate the price at which the investor will get a margin call.

  Exchange exposure does jones face for each foreign currency

What net foreign exchange exposure does Jones face for each foreign currency, stated in dollars?

  The highest future value at the end of ten years

Which of the following investments would have the highest future value at the end of 10 years?

  How much more will pay over the life of the loan

Siena Normann is buying her first new car. The purchase price is $22,350 and she’ll put $2,350 down. She will finance the car over five years at 7.25%. Her twin sister, Reese, is buying the same car, but because she has a higher credit score, her rat..

  Firm common stock trades

The firm's common stock trades for $27 and just paid a dividend of $5.00. Dividends are expected to grow at 3% forever.

  The dividend will grow at a quarterly rate

Thereafter, the dividend will grow at a quarterly rate of 1.2 percent, forever. The appropriate rate of return on the stock is 10 percent, compounded quarterly.

  What would be additional funds needed

Broussard Skateboard's sales are expected to increase by 15% from $7.8 million in 2016 to $8.97 million in 2017.What would be the additional funds needed?

  Ratios depicts investment efficiency

The account that reflects the amount the owners have invested in the business is: Arson Incorporated's balance sheet lists assets at historical cost less accumulated depreciation. Which of the following ratios depicts investment efficiency? Projectin..

  Capital structure weights on a book value basis

Erna Corp. has 9 million shares of common stock outstanding. The current share price is $81, and the book value per share is $8. Erna Corp. also has two bond issues outstanding. What are Erna’s capital structure weights on a book value basis?

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