Value of six-month futures contract on treasury bond

Assignment Help Financial Management

Reference no: EM131301971

Calculate the value of a six-month futures contract on a Treasury bond. You have the following information: (Do not round intermediate calculations. Round your answer to 3 decimal places.)

Six-month interest rate: 10% per year

Spot price of bond: 90.00.

Bond coupon: 8%, paid as 4% every six months.

Reference no: EM131301971

Questions Cloud

What is the price of a four-month forward price : Suppose the stock price is $50 and the continuously compounded interest rate is 10%. What is the price of a 4-month forward price, assuming dividends are zero? If the 4-month forward price is $51.1, what is the annualized forward premium?

What is the effective annual rate of interest : The disposable income from your part-time job in 2012 and 2013 is $16,500. In 2012, you borrowed $900 at 18 percent interest. You repay your loan with interest in 2013. What is the effective annual rate of interest?

What is the price of a one year forward contract : Suppose the stock price is $50 and the continuously compounded interest rate is 10%. The stock pays dividends every 3 months, with the first dividend coming 3 months from today. If the dividend payment is $2 each, what is the price of a 1-year prepai..

What is the maximumyousould pay for the property : Your grandparnets left you some rental property that will gnerate $10,000 a year for five years then $12,000 for the next 5 years, and then you plan on selling it at the end of 10 years for $100,000. If you can earn 10 percent on your funds, what is ..

Value of six-month futures contract on treasury bond : Calculate the value of a six-month futures contract on a Treasury bond.

What is the bonds promised yield to maturity : You own a bond with an annual coupon rate of 6% maturing in two years and priced at 88%. Suppose the probability is 11% that at maturity the bond will default and you will receive only 41% of the promised payment. Assume a face value of $1,000. What ..

What is the balance for long-term debt and retained earnings : Glen’s Tobacco Shop has total assets of $93.6 million. Fifty percent of these assets are financed with debt of which $29.3 million is current liabilities. The firm has no preferred stock but the balance in common stock and paid-in surplus is $13.4 mi..

Find monthly income required to pay all of costs mentioned : Luxury boxes have been constructed at a football stadium at a cost of $4,000,000 paid at EOM 0. In addition to construction, heavy maintenance is expected to occur every 24 months thereafter en perpetuity and cost $100,000 for every occurrence. Find ..

What is the level of capitalization necessary for project : Your city has asked you to determine the capitalization necessary to build and maintain a new sewage treatment plant, which has a 20 year life span. The plant will cost $20 million to build, and will require $1.5M every 10 years for equipment replace..

User Account

All Pages