The futures price quote for contract

Assignment Help Financial Management
Reference no: EM13922186

The current level of the S&P 500 is 1,500. The dividend yield on the S&P 500 is 7%. The risk-free interest rate is 8%. The futures price quote for a contract on the S&P 500 due to expire 6 months from now should be __________.

A) 1,513.20

B) 1,530.16

C) 1,525.62

D) 1,507.48

Reference no: EM13922186

Questions Cloud

About the future value of an annuity : Your client is 29 years old; and she wants to begin saving for retirement, with the first payment to come one year from now. She can save $9,000 per year; and you advise her to invest it in the stock market, which you expect to provide an average ret..
Paper based on best instructional practices : You will write a scholarly paper based on best instructional practices. Frame your paper so that you are focused on a specific context (e.g. high school biology) so that you are able to generate ideas for application as your write your paper.
Outline and explain ethical theories : Week One Journal Objective You will outline and explain ethical theories and then apply that knowledge to how organizations would function were they to adopt those ethical principles. In addition, you will also examine punishments for corporations..
What are the effects on the after-tax profits and cash flow : A project currently generates sales of $11.4 million, variable costs equal to 50% of sales, and fixed costs of $3.4 million. The firm’s tax rate is 30%. a. What are the effects on the after-tax profits and cash flow, if sales increase from $11.4 mill..
The futures price quote for contract : The current level of the S&P 500 is 1,500. The dividend yield on the S&P 500 is 7%. The risk-free interest rate is 8%. The futures price quote for a contract on the S&P 500 due to expire 6 months from now should be __________.
Share value using the discounted dividends method : Assume a firm will pay its first dividend in 2 years. This initial period’s dividend is forecast to be $3.00 per share for the first 3 years and then is expected to grow at 4% per year in perpetuity. Assume WACC = 12%; the cost of equity is 16%; the ..
Suppose the real risk-free rate : Suppose the real risk-free rate is 3.00%, the average expected future inflation rate is 6.20%, and a maturity risk premium of 0.10% per year to maturity applies, i.e., MRP = 0.10%(t), where t is the years to maturity. What rate of return would you ex..
How is safety stock included in a material requirements plan : How is safety stock included in a material requirements plan? What factors can create safety stock requirements in an MRP system? What is meant by the term safety time?
Perform sensitivity analysis on assumptions : BMT has developed a new product. It can go into production for an initial investment of $4,000,000. The equipment will be depreciated using straight-line depreciation over 4 years to a value of zero. perform sensitivity analysis on the following assu..

Reviews

Write a Review

Financial Management Questions & Answers

  Consider a project that has expected net cash flows

Consider a project that has expected Net Cash Flows of $25,000 in each of the 5 years of the project. The project has a Net Investment of $80,000. Given this, what is the IRR?

  Balance in the account four years after the last deposit

Victor French made deposits of $5,500 at the end of each quarter to Book Bank, which pays 8% interest compounded quarterly. After 5 years, Victor made no more deposits. What will be the balance in the account 4 years after the last deposit?

  Trade credit obligation to supplier in cash

Suppose a firm pays a 50,000$ trade credit obligation to a supplier in cash. What impact does this transaction have on the firm's current ratio if the intial current ratio equaled 1? What impact does this transaction have on the firm's current ratio ..

  Considering four-year project to production efficiency

Warmack Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $500,000 is estimated to result in $205,000 in annual pretax cost savings. The press also requires an initial investment in s..

  Pricing objectives and pricing methods

Pricing objectives and pricing methods in the services sector

  Real interest rates are generally higher than nominal rate

On average, a coupon bond will increase in value as it approaches maturity. A bond with a coupon rate higher than its yield is worth more than its par value. Real interest rates are generally higher than nominal interest rates.

  Investments net present value and internal rate of return

Management of a firm with a cost of capital of 12 percent is considering a $100,000 investment with an annual cash flow of $44,524 for three years. What are the investment's net present value and internal rate of return?

  Management accounting advice to not-for-profit firms

Cray-Z Consultants provides management accounting advice to not-for-profit firms. It employs three levels of consultants, based on experience and education: partner, senior, and associate. When Cray-Z considers bidding on jobs, it estimates the costs..

  Financing methods is considered back-door equity financing

Which of the following financing methods is considered a “back-door equity” financing?

  The average annual growth rate of dividends for this firm

A firms dividends have grown over the last several years. 3 years ago the firm paid a dividend of $2. Yesterday it paid a dividend of $4. What was the average annual growth rate of dividends for this firm? Round the answer to two decimal places in pe..

  The difference between an entitys assets and liabilities

[Extra Credit] The difference between an entity's Assets and Liabilities is its ____. [Extra Credit] The regional Federal Reserve banks influence the conduct of monetary policy by _____.

  Arithmetic average return on the stock over five-year period

You've observed the following returns on Doyscher Corporation's stock over the past five years: -25.8 percent, 14.2 percent, 31.4 percent, 2.6 percent, and 21.6 percent. What was the arithmetic average return on the stock over this five-year period?

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd