The spot price of an investment asset

Assignment Help Financial Management
Reference no: EM13925407

The spot price of an investment asset that provides no income is $40, and the risk-free rate for all maturities (with continuous compounding) is 9%. What, to the nearest cent, is the 4-year forward price?

Reference no: EM13925407

Questions Cloud

Quoted price of a bond with an actual : It is May 1, and the quoted price of a bond with an Actual/365 day count and 8% per annum coupon in the United States is 104. It has a face value of 100 and pays coupons on April 1 and October 1. What is the cash price rounded to the nearest whole nu..
Photography services : Photography services of $8,325 have been rendered, but customers have not yet paid or been billed. The firm uses the account Fees Receivable to reflect amounts due but not yet billed.
What is the cash price rounded to the nearest whole number : It is May 1, and the quoted price of a bond with an Actual/365 day count and 8% per annum coupon in the United States is 104. It has a face value of 100 and pays coupons on April 1 and October 1. What is the cash price rounded to the nearest whole nu..
Describe the impact of changing demographics : Describe the impact of changing demographics on the healthcare market. Describe the impact of chronic disease wellness programs on health care costs. Explain the relationship between consumer choices and the health care market. Find Information on po..
The spot price of an investment asset : The spot price of an investment asset that provides no income is $40, and the risk-free rate for all maturities (with continuous compounding) is 9%. What, to the nearest cent, is the 4-year forward price?
Susan advertised a nice painting that sally : Susan advertised a nice painting that Sally wanted to buy. Sally contacted Susan and offered her $2,750 for the painting. Susan emailed Sally that she accepted the offer. Sally responded that she would be at Susan's home by noon the next day with the..
What is continuously compounded zero rate : The 6-month zero rate is 8% with semiannual compounding. The price of a 1-year bond that provides a coupon of 12% per annum semiannually is 95. What is the 1-year continuously compounded zero rate?
Allowance for doubtful accounts : Craigmont uses the allowance method to account for uncollectible accounts. Its year-end unadjusted trial balance shows Accounts Receivable of $146,500, allowance for doubtful accounts of $1,085 (credit) and sales of $1,135,000
Retained earnings : Use the following information to prepare a classified balance sheet for Watkins Co. at the end of 2013

Reviews

Write a Review

Financial Management Questions & Answers

  After-tax cost of preferred stock

Calculate the after-tax cost of preferred stock for Bozeman-Western Airlines Inc. which is planning to sell $10 million of $6.50 cumulative preferred stock to the public at a price of $50 a share. Issuance costs are estimated to be $2 a share. The co..

  Fixed selling and administrative costs

U.S. Telephone Cellular sells phones for $100. The unit variable cost per phone is $50 plus a selling commission of 10% (based on the unit sales price per phone). Fixed manufacturing costs total $1,040 per month, while fixed selling and administrativ..

  Firm according to modigliani-miller with corporate taxes

Eccles Inc., a zero growth firm, has an expected EBIT of $120,000 and a corporate tax rate of 35%. Eccles uses $500,000 of 12% debt, and the cost of equity to an unlevered firm in the same risk class is 16%.

  Calculate the price of a share of companys common stock

You are given the following information: Stockholders' equity = $3.75 billion, price/earnings ratio = 15.5, common shares outstanding = 12 million, and market/book ratio = 2. Calculate the price of a share of the company's common stock. Round your an..

  What is the current value of share of stock to investor

General Cereal common stock dividends have been growing at an annual rate of 7 percent per year over the past 10 years. Current dividends are $1.70 per share. What is the current value of a share of this stock to an investor who requires a 12 percent..

  Determine swaption payoff at expiration

Which of the following is not required to determine a swaption payoff at expiration?

  Long-term instruments is determined largely independently

Which yield curve theory is based on the premises that financial instruments of different terms are not substitutable and therefore the supply and demand in the markets for short-term and long-term instruments is determined largely independently?

  What amount should be used as the initial cash flow

Marshall's & Co. purchased a corner lot in Eglon City five years ago at a cost of $640,000. The lot was recently appraised at $670,000. At the time of the purchase, the company spent $30,000 to grade the lot and another $3,200 to build a small buildi..

  Trade credit terms-annualized cost of forgoing the discount

If a firm buys trade credit terms of 4/10, net 60 and decides to forgo the trade credit discount and pay the next day, what is the annualized cost of forgoing the discount assuming a 360 day year?

  What is dirty price of this bond if market rate of return

Toy World bonds have a face value of $1,000, mature in13 years, pay interest semi annually, and have a coupon rate of 6.5 percent. The next interest payment will be paid four months from today. What is the dirty price of this bond if the market rate ..

  Semi-annual bond with a coupon rate

XYZ has just sold a callable bond. The bond is a thirty year semi-annual bond with a coupon rate of 8%. Investors, however, can call the bond starting at the end of ten years. If the yield-to-call on this bond is 10% and the call requires XYZ to pay ..

  Cash flows over the four-year life of the investment

An investment has an installed cost of $535,800. The cash flows over the four-year life of the investment are projected to be $213,850, $230,450, $197,110, and $145,820. If the discount rate is zero, what is the NPV?

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