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Suppose that the current price of titanium is $50G per oz with costless storage. The term structure is ?at with a continuously compounded rate of interest of 4% for all maturities
a) Find the forward price of titanium with delivery in three months
b) Assume it costs $?-5 per oz per month to store titanium. The storage cost is payable monthly in advance. What is the new forward price? What can explain ?1e price difference in (a) and (b)?
c) Assume storage costs are as in (b) and payable monthly in advance. If the forward price is given to be $550 per oz1 explain whether there is an arbitrage opportunity and how to exploit it. Use a table showing transactions and total net cash ?ows at the end of each month.
What is your guess regarding management's perception of the firm's long-run earnings (rounded to the nearest cent)?
Find out present value of $300 received at the beginning of each year for 5 years? Suppose that the first payment is not received until the beginning of the third year.
Explain the independent statements below is false. A good explanation should be between two and four sentences for each part.
Prepare a pro forma income statement for the home office systems at annual sales of $20,681,818.
Calculate the amount of the firm's income before tax?
Abner? Corporation's bonds mature in 15 years and pay 7 percent interest annually. If you purchase the bonds for ?$825?, what is your yield to? maturity?
The annual interest rate on one-year, U.S. government bonds is 5 percent. The annual interest rate on one-year Swedish government bonds is 7 percent.
What was the general effect of the financial crisis on the money market instruments amount outstanding and why did it have this effect?
Compute the price of the bonds based on semiannual analysis. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Mary purchased 100 shares of Sweet Pea Co. stock at a price of $40.31 six months ago. She sold all stocks today for $45.36. During that period the stock paid dividends of $1.25 per share. What is Mary's effective annual rate?
A bond trader purchased each of the following bonds at a yield to maturity of 8 percent. Immediately after she purchased the bonds, interest rates fell to 7 percent. What is the percentage change in the price of each bond after the decline in interes..
Create an annual expense budget for your needs in your first year of retirement using today's dollars. For example, you may have no mortgage payment due in retirement.
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