User Account

All Pages

Index futures prices with a market risk premium

Assignment Help Finance Basics
Reference no: EM131401873

(Index futures prices with a market risk premium) Suppose that the risk-free interest rate is 3% per annum with continuous compounding and that the dividend yield on a stock index is 4% per annum. The index is currently 400, and has an excess expected return of 6% for market risk. What is the futures price with a four month maturity?

Reference no: EM131401873

Questions Cloud

Explain two basic principles of interpersonal communications : Explain two basic principles of interpersonal communications. Describe an instance of miscommunications. Identify one or more challenges or barrier that caused this miscommunication
To what extent is the internet itself competitive : Can competitive conditions develop from information technology, a technology that was created initially by centralized planning, that depends on agreed-upon rules to conduct business, and that has notoriously low marginal costs? (Think of the cost..
What is the expected return of security : a. Security C has the same payoffs as what portfolio of the securities A and B in problem A.1? b. What is the no-arbitrage price of security C? c. What is the expected return of security C if both states are equally likely? What is its risk premium?
Was given a stratified sample or a blocked experiment : Was this a stratified sample or a blocked experiment? Explain.- Was the design of the study appropriate for the advertisers' questions?
Index futures prices with a market risk premium : Suppose that the risk-free interest rate is 3% per annum with continuous compounding and that the dividend yield on a stock index is 4% per annum. The index is currently 400, and has an excess expected return of 6% for market risk. What is the fut..
Define the remedy the plaintiffs are seeking : Define the "tort" involved and explain the details of the case that led you to your conclusion. Define the type of damages the plaintiffs are claiming. Define the remedy the plaintiffs are seeking
Identify the key and underlying issues : Identify the key and underlying issues. This is not a simple listing, but more of an in-depth analysis and how these apply to the concepts and theories you have learned within the course.
Why does text spend so much time on perfect competition : Based on your answer to a, why does the text spend so much time on perfect competition? (Institutionalist)
Identify the treatment and response variables : What kind of study was this?- Is that an appropriate choice for this problem?- Who were the subjects?- Identify the treatment and response variables.

Reviews

Write a Review

Finance Basics Questions & Answers

  The state of florida offers her a lump sum

1. Susie wins the lottery. The State of Florida offers her a lump sum of $629401 today or the option of receiving 18 annual payments. What annual payments would be equivalent to the lump sum up front, assuming a 6% interest rate?

  Evaluating the quality of a firm financial statement

Discuss the importance of quality in a firm's financial statements and how you would go about evaluating the quality of a firm's financial statement. What do you consider to be the four main pro forma financial statements to financial forecasting,..

  Calculate the amount for her and explain the account

Annie's mortgage statement shows a total payment of $699.12 with $604.60 paid toward principal and interest and $94.52 paid for taxes and insurance. Taxes and insurance for 3 months were collected at closing. Now after 6 months of payments, she..

  Loss on the trade before commissions and taxes

Assume an option trader bought 10 July 25 calls on General Electric Co. (GE) for 1.35. If the stock closed at 28 on expiration and the option position was liquidated, calculate the dollar amount of profit or loss on the trade before commissions an..

  What is the adjusted seasonal index for quarter one

What is the adjusted seasonal index for Quarter 1 Answer %? What is the centred moving average that would correspond to Quarter 1 in 2006?

  Calculation where the market drops by 10 percent

(Systematic risk and expected rates of return) The followin table contains beta coefficient estimates  for six firms. Calculate the expected increase in the value of each firm's shares if the market portfolio  were to increase by 10 perc..

  Estimate what the apparent power applied to the transformer

Consider a lossless rectifier and no voltage drops across the connections. Estimate what the apparent power applied to the transformer would be in both cases if its primary resistance was R = 1.8 Ω.

  Analyze whether the investment in the truck is profitable

Explain how Stephanie should convince her mother that it is inappropriate to call the bank manager and his wife for assistance in getting the loan approval? Analyze whether the investment in the truck is profitable

  Problem regarding the debt financing

Do you need to know where the debt financing comes from first to know if a deal is good or not?

  Would gerald acquire a security with a beta

Assuming a risk-free rate of 8 percent and a market return of 12 percent, would Gerald acquire a security with a Beta of 1.5 and a rate of 14 percent given the facts above?

  Indicate which test you are performing show the hypotheses

Indicate which test you are performing; show the hypotheses, the test statistic and the critical values and mention whether one-tailed or two-tailed. There is sufficient evidence to conclude that the claim of this hypothetical weight loss programs ha..

  Bullock gold mining

Seth Bullock, the owner of Bullock Gold Mining, is evaluating a new gold mine in South Dakota. Dan Dority, the company's geologist, has just finished his analysis of the mine site. He has estimated that the mine would be productive for eight ye..

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