User Account

All Pages

Value of the short position in the forward contract

Assignment Help Finance Basics
Reference no: EM133119359

Today's stock index is at 3500. The index provides a dividend yield of 1.2% p.a., continuously compounded. Risk free rate is at 1.8% p.a..

Consider a 6 month forward contract on the index.

Suppose in 3 months the index will be at 3000, What will be the value of the short position in the forward contract?

(Write the formula of short position in forward contract and calculate the value in detail.)

Reference no: EM133119359

Questions Cloud

What is the sustainable growth rate for greenwich : You have located the following information on Greenwich Company: debt ratio = 60 percent, capital intensity ratio = 0.75 times, profit margin = 13.5 percent, an
What is the value of john''s forward contract : On June 19, 2021 John entered into a forward contract to buy £100,000 for C$235,000 on June 19, 2022. It's now September 19, 2021, the nine-month forward exchan
Interbank lending and borrowing rates : You expect that the Mexican peso will depreciate against the Australian dollar from its spot rate of A$0.2595 to A$0.2282 in one year. The following interbank l
Reasonable racial discrimination and police deviance : Compare the terms "reasonable" racial discrimination and police deviance. Provide an example for each, detailing specific differences.
Value of the short position in the forward contract : Today's stock index is at 3500. The index provides a dividend yield of 1.2% p.a., continuously compounded. Risk free rate is at 1.8% p.a..
What is the value of the call option : What is the value of the call option if the strike price is $75 per share? (Round answer to 2 decimal places. Do not round intermediate calculations).
Explain the investment appraisal process : (a) Explain why risk and uncertainty should be considered in the investment appraisal process.
What is the value today of a money machine : What is the value today of a money machine that will pay $1,437.00 per year for 18.00 years? Assume the first payment is made 5.00 years from today and the inte
Describe situation in which you have experienced harm : Describe a situation in which you have experienced harm as a consequence of a failure of computer security. Was the failure malicious or not?

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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