User Account

All Pages

Find the cash flow from the mark-to-market

Assignment Help Finance Basics
Reference no: EM133060474

The multiplier for a futures contract on the stock-market index is $50. The maturity of the contract is one year, the current level of the index is 2,000, and the risk-free interest rate is 0.3% per month. The dividend yield on the index is 0.2% per month. Suppose that after one month, the stock index is at 2,040.

a. Find the cash flow from the mark-to-market proceeds on the contract. Assume that the parity condition always holds exactly. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

b. Find the one-month holding-period return if the initial margin on the contract is $10,000. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Reference no: EM133060474

Questions Cloud

What does this risk-return tradeoff mean : What does this risk-return tradeoff mean to the financial management of a firm? What are the possible impacts on the firm
Expected standard deviation for proposed project : Your management team has put together the following projections for a project that your company may be interested in implementing.
People have considered variety of policy issues : People have considered a variety of policy issues. Brainstorm about two policy issues that are important to you or your family.
What the average unit cost for inventory : Smooth Tish Inc. purchased the following inventory: 200 units at $9 300 units at $10 After both purchases, what the average unit cost for inventory
Find the cash flow from the mark-to-market : The multiplier for a futures contract on the stock-market index is $50. The maturity of the contract is one year, the current level of the index is 2,000
Compare the possible theoretical orientations : Compare the possible theoretical orientations appropriate to your assumed role, and identify your treatment orientation. Identify which modalities
Represent the return-beta relationship : 1.You are considering a 2-factor model using the Arbitrage Pricing Theory (APT) to price a stock. You determine that the risk premiums on the two factors are 6%
Default risk premium on the corporate bonds : A company's 5-year bonds are yielding 7.5% per year. Treasury bonds with the same maturity are yielding 5.2% per year and the real risk-free rate is 2.3%.
Should Highope Ltd recognise an asset in relation : Should Highope Ltd recognise an asset in relation to the exploration costs? Justify in accordance with the relevant Conceptual Framework de?nition

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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