Explain about futures price calculation

Assignment Help Finance Basics

Reference no: EM13826298

Problem:

Today is 31st May. The yield on T-bills is 3% per annum. The futures price for June 30th delivery of Gold is $1593.60 for December 30th delivery the price is $1600.00.

a. Does this pricing present an arbitrage opportunity? Provide a full explanation of your reasoning.

b. How might you construct a portfolio to exploit any such arbitrage opportunity that existed?

c. What are the risks in any such portfolio?

Additional Information:

This question is basically belongs to the Finance as well as it explain about futures price calculation.

Reference no: EM13826298

Questions Cloud

Models of automatic dishwashers : DeMarcus Industries manufactures a widget used in several models of its automatic dishwashers. Monthly production costs for 5,000 units are:

Which a multi-metaphor analysis of the situation is required : This problem belongs to Business Management and it deals with a managerial situation or problem or event which a multi-metaphor analysis of the situation is required. Metaphors have been part of literature since times immemorial

Calculate the payback period for the proposed investment : Payback, NPV, and IRR Rieger International is attempting to evaluate the feasibility of investing $95,000 in a piece of equipment that has a 5-year life. Calculate the payback period for the proposed investment. Calculate the net present value (NPV) ..

Report on development and management of strategic marketing : Report On Development And Management Of Strategic Marketing Plan

Explain about futures price calculation : Today is 31st May. The yield on T-bills is 3% per annum. The futures price for June 30th delivery of Gold is $1593.60 for December 30th delivery the price is $1600.00.

Calculate the net present value-cost of capital : NPV Calculate the net present value (NPV) for the following 15-year projects. Comment on the acceptability of each. Assume that the firm has a cost of capital of 9%.

Write detailed report on chinas growth in last thirty years : The question is belongs to Economics and the question is about the growth rate achieved by China in the last 30 years beginning from 1978 to 2009.

Calculate the operating cash flows : Laurel’s Lawn Care, Ltd., has a new mower line that can generate revenues of $135,000 per year. Direct production costs are $45,000, and the fixed costs of maintaining the lawn mower factory are $17,500 a year. The factory originally cost $0.9 millio..

Calculation of capm of a company : Calculate the CAPM for a company and write a report on it. The chosen company is Fidelity National Information Services (FIS) listed on the NYSE.

User Account

All Pages