Value of the existing forward contract today

Assignment Help Finance Basics
Reference no: EM132579672

Susan bought a two-year equity forward contract at $152 and suppose today is nine months to expiration. The underlying is currently trading for $165, and interest rates are 5% on an annual compounding basis.

-If there are no other carry cash flows, how much is the value of the existing forward contract today?

-Suppose that instead of buying a forward contract, Susan bought a two-year equity futures contract at $152 and there are now nine months to expiration. Today's futures price is $167. There are no other carry cash flows. After marking to market, how much is the value of the existing futures contract today?

Reference no: EM132579672

Questions Cloud

Discuss two concepts of developing research questions : Discuss two concepts below in this course that you believe will be most applicable to the professional discipline you will enter upon completion
Seaver books act ethically in reinstating debt of one client : Did Seaver Books act ethically in reinstating the debt of one client, and not the other? Explain.
What are environmental disadvantages to plastic packaging : How do product characteristics influence packaging and materials handling considerations? What are some environmental disadvantages to plastic packaging?
Physician reference service : Physician Reference Service (PRS) provides services to physicians including research assistance, diagnosis coding and medical practice software
Value of the existing forward contract today : If there are no other carry cash flows, how much is the value of the existing forward contract today?
Separate accounts payable computer systems : Hannah Company maintains two separate accounts payable computer systems. Is it ethical for a company to have a secret system like the one described? Explain.
Explain the concepts of fashion and confrontation dressing : What are some of the musical and textual characteristics of "I Will Survive" that Hubbs links to its themes of marginalization and transcendence?
Investment in the short-term investment category : Is it ethical for Greyhound to attempt to take over another company? Is it ethical for Greyhound to leave its investment in the short-term investment category?
Research on agricultural workers : In your research on agricultural workers what realities of their lives you found most disturbing about their working conditions.

Reviews

Write a Review

Finance Basics Questions & Answers

  Procure estimates of current mortgage rates

Procure estimates of current mortgage rates, including discount points, on 30 year fixed rate mortgage payments for a $200,000 conventional mortgage from four mortgage lenders. Is it worth it to pay any of the required points if you can only count on..

  What overall venture investment discount rate would be used

Determine the rate components and their returns that a venture investor like VentureBanc would require to be covered beyond a traditional cost-of-equity estimate. What overall venture investment discount rate would be used by VentureBanc?

  Annual weighted average cost of capital

The firm's marginal income tax rate is 25%. What is its annual weighted average cost of capital (kA or WACC)?

  Owner of a whole life insurance policy in the amount

Imagine that you are the 70-year-old owner of a whole life insurance policy in the amount of $100,000. You bought the policy at the age of 25

  What is the required rate of return on stock

The current dividend yield on their common stock is 3.2 percent. What is the required rate of return on this stock?

  Compute the contribution per unit of both product

ECM05EKM Financial Analysis for Managers Assignment - Middle East College, Oman. Compute the contribution per unit of both Product

  Run the appropriate regression to estimate the average

Run the appropriate regression to estimate the average variable cost function (AVC) for Sting Rays. Evaluate the statistical significance of the three estimated parameters using a significance level of 5 percent.  Be sure to comment on the algebraic ..

  What is the forecast of stratus profit

What is the forecast of Stratus' profit of years 4 and 5? You can use the percentage of sales method explained in chapter 14 (see the connections website

  Employee at a financial institution

You are a finance employee at a financial institution, specializing in originating auto loans in a country where auto loans have only been available for 2 years. Your group has just been informed that a close competitor has securitized $150 millio..

  Gave enormous trading authority to one individual

In the process, the bank gave enormous trading authority to one individual. What are the ERM strengths and weaknesses of this strategy?

  Represent one month of raw materials

The production cycle last one month, which means that in-progress inventories represent one month of raw materials and 15 days of production costs.

  Klingon widgets inc purchased new cloaking machinery three

klingon widgets inc. purchased new cloaking machinery three years ago for 4.6 million. the machinery can be sold to the

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