Find the predicted futures price

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Julan takes a long futures position in silver at $22.50 per ounce with three month maturity. At maturity silver sells in the market for $23.50 per ounce. How much is profit per contract (ignoring commission) if one contract involves 5,000 ounces?

Chan Board of Trade offers futures contract on Hassen, Inc. Assume risk free interest rate is 0.25% per month and Hassen stock sells for $450 per share.

(a) Find the predicted futures price (on Hassen) for delivery in 3 months.

(b) If the futures price on Hassen stock in the market is $455.00, is the spot-futures parity relationship violated? If yes, show the strategy and the cash flows at time 0 and at time T (maturity) that will create an arbitrage opportunity (as shown in class).

Reference no: EM132355675

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