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Assignment: Download some futures prices with at least 6 expirations, and 6 call option prices on the same underlying. Data are available, for example, from the CME-NYMEX website. Then answer the following questions. 1)
For the futures prices, calculate the difference between the price today (called the "spot price) of the underlying and the forward prices that you have downloaded: Forward price - spot price This difference is called the "forward premium". You should calculate 6 of them corresponding to the 6 expirations. What do these numbers tell you about the future of spot prices? How do you know? 2) For the options quotes data that you downloaded, provide a brief summary of the range of strike prices, maturities and premia that you found. 3) In the form of a table, report which options are out-of-the money and which are in-the-money. Calculate the moneyness of each option. 4) Calculate the insurance value of each option.
Suppose that a one-year Treasury securities yield 5%.The market anticipates that 1 year from now, one-year Treasury securities will yield 6 percent. So if the pure expectations theory is correct,
Park Place will provide $370,000 per year in cash flow (aftertax income plus depreciation) for the next 25 years. If Boardwalk Corporation has a cost of capital of 13 percent. Use Appendix D.
Compute the accounts receivable balance before and after the change in the cash discount policy. Use the net sales and determine the EOQ before and after the change in the cash discount policy. Translate this into average inventory (in units and ..
Kent, a colleague of Frank at the same firm is less optimistic. Brett thinks the ABC company will begin paying a divident in 4 yrs and it will be $2.50 and it will grow at a rate of 3% annually. John and James agree that the required return for AB..
The computer falls into the three-year class for tax depreciation, so MACRS allowances are 0.33, 0.45, 0.15, and 0.07 in Years 1 through 4, respectively (yes, the 3-year class has 4 years...I find humor even in accounting).
Overall Risk Profile of the Company: Overall risk profile of ABC Company based on current economic and industry issues that it may face are described below-
firm a has 10000 in assets entirely financed with equity. firm b also has 10000 in assets but these assets are financed
q. after graduating from graduate school you create it big-all because of your success in financial management. you
many businesses use our natural resources to produce the goods and services that they sell. find a company that deals
Lyle Shipping, a British company, has chartered out ships at fixed-U.S.-dollar freight rates. How can Lyle use financing to hedge against its exposure? How will your recommendation affect Lyle's translation exposure?
etsitty arts inc. a leading producer of fine cast silver jewelry is considering the purchase of new casting equipment
You select a random sample of 200 students and assume that the students have no ability to distinguish between the two brands. (Hint: If an individual has no ability to distinguish between the two soft drinks, then the two brands are equally likel..
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