Equity portfolio manager forecasts

Assignment Help Financial Management

Reference no: EM131307889

In April an equity portfolio manager forecasts that there will be a significant decrease in share prices by September. The value of the portfolio is $25 million and in April the September SPI futures are trading at 4800.

1. How many contracts are required? (round to the nearest whole number)?

2. Calculate the profit or loss on the futures position if in September the September SPI futures are trading at 4650.?

Reference no: EM131307889

Questions Cloud

Using the fasbs codification : Using the FASB’s codification, research How Nissan should depreciate their robots used in their Canton, Mississippi manufacturing plant. Summarize your findings and copy and paste the relevant codification below your summary. Submit this paper throug..

What is the average inventory including safety stock : Appliances for Less is a local appliance store. It costs this store $20.98 per unit annually for storage, insurance and so forth to hold microwaves in its inventory. Sales this year are anticpated to be 378. each order costs $76. The company is using..

What is the minimum interest rate : Dennis earns $55,000 in the current period and will earn $85,000 in the future. What is the minimum interest rate that would allow Dennis to con- sume $180,000 in the future period? What is the maximum interest rate that would allow Dennis to con- su..

Find the spreads of the dollars : Using the information below, find the spreads of the US$ and € against sterling for sales or purchases one month from now: Spot rate US$ 1.9010-1.9927 € 1.4854–1.4878 One month from now 1.47–1.44c pm 1.43–1.34c dis Three months from now 3.93–3.85c pm..

Equity portfolio manager forecasts : In April an equity portfolio manager forecasts that there will be a significant decrease in share prices by September. The value of the portfolio is $25 million and in April the September SPI futures are trading at 4800. How many contracts are requir..

Calculate and compare the risk : Calculate and compare the risk (betas) of the following investments: In each case assume that the exercise price of the option is $430, a share of Google stock; a one-year call option on Google; a one-year put option; In each case assume that the exe..

What is the incremental profit : Schweser Satellites Inc. produces satellite earth stations that sell for $109,525.00 each. The firm's fixed costs, F, are $1.70 million, 49 earth stations are produced and sold each year, profits total $415,600.00; and the firm's assets (all equity f..

Floating rate and receiving swiss francs at a fixed rate : Show how to combine a currency swwap paying Swiss francs at a floating rate and receiving Japanese yen at a floating rate with another currency swap to obtain a plain vanilla swap paying Swiss francs at a floating rate and receiving Swiss francs at a..

Calculate net swap payment-indicating with party pays it : Consider a $100 million equity swap with semiannual payments. When the swap is established, the underlying stock is at 1,215.52. One party pays a fixed rate of 5.5% based on the assumption of 30 days per month and 360 days per year. If the stock inde..

User Account

All Pages