User Account

All Pages

What is the future new position value

Assignment Help Finance Basics
Reference no: EM132473730

Gold price today is $1445; the future price that expires in 6 months (June 2020) is $1460 per ounce. You believe the price of gold will go up over the next 6 months. So, you will buy one futures contract that expires in June 2020. There are 100 ounces of gold in each futures contract and margin requirement for gold future is $35oo per contract.

  • What's your future's initial position value when you buy this future contract?
  • If 6 months later, the price of gold goes up to $1470, what's the future's new position value?
  • What's your return on investments (ROI) from the trade?
  • What's the basis of the June 2020 futures?
  • If the risk-free rate is 3%, what's the gold future price for June 2020 according to the spot future parity?

Reference no: EM132473730

Questions Cloud

Determine What is the value of P : Bond 1 has a coupon rate c4= 13% and sells for $19012.33. Bond 2 has coupon rate c4= 3.1% and sells for $ P. What is the value of P?
How do prepare post-closing trial balance at july : How do Prepare post-closing trial balance at July 31? Blossom Company ended its fiscal year on July 31, 2020. The company's adjusted trial balance
How will you set aside the appropriate amount of time : How will you set aside the appropriate amount of time (identify, implement, and score) for the assessment in order to provide appropriate feedback).
Calculate the depreciation tax shield for project : Assume a tax rate of 21 percent and a discount rate of 11 percent. Calculate the depreciation tax shield for this project in year 3.
What is the future new position value : If 6 months later, the price of gold goes up to $1470, what's the future's new position value? What's your return on investments (ROI) from the trade?
How will you communicate that with your client : Consider the time you need to identify, implement, score, and provide feedback for an assessment, how will that translate into billable hours to the client.
Which of the is closest to your return assuming : Which of the following is closest to your return assuming you receive no margin calls during the year?
How you will implement practices into your coaching practice : Discuss how you will implement those best practices into your coaching practice. Identify challenges you might face in implementing those best practices.
How do journalize the september transactions : How do Journalize the September transactions? On September 1, Monty Office Supply had an inventory of 30 calculators at a cost of $16 each.

Reviews

Write a Review

Finance Basics Questions & Answers

  What is mullineauxs wacc

Mullineaux Corporation has a target capital structure of 70 percent common stock, 10 percent preferred stock, and 20 percent debt. Its cost of equity is 12 percent, the cost of preferred stock is 6 percent, and the pretax cost of debt is 8 percent..

  Present value of the resulting depreciation tax

A firm plans to purchase a $50,000 asset that will be depreciated straight-line over a 5-year life to a zero salvage value. What is the present value of the resulting depreciation tax shield if the tax rate is 35% and the discount rate is 10%?

  Describe origination of funding for your business venture

Describe origination of funding for your business venture and include a description of the two main sources of funding (equity and debt funding).

  Compute the incremental income after taxes

Johnson Electronics is planning extending trade credit to some customers previously considered poor risks. Sales would increase by $100,000 if credit is extended to these new customers.

  What is the equivalent annual cost of each light bulb

A kilowatt-hour is 1,000 watts for 1 hour. If you require a 10 percent return and use a light fixture 500 hours per year, what is the equivalent annual cost of each light bulb?

  What are the ethical implications of undertaking transaction

What are the ethical implications of undertaking transactions expressly to temporarily hide how much money a firm has borrowed?

  What is value of project after considering the investment

The project WACC is 10.8%. What is the value of the project after considering the investment timing option?

  Constant growth rate in dividends

You also know that the total return on the stock is evenly divided between the capital gains yield and the dividend yield. What is the current dividend per share if it's the company's policy to always maintain a constant growth rate in its dividen..

  You are planning to make annual deposits of 5730 into a

you are planning to make annual deposits of 5730 into a retirement account that pays 9 percent interest compounded

  What is the probability that a randomly selected person

What is the probability that a randomly selected person in this city will have a commute time between 0.2 and 1 hours?

  What does the term status quo refer to

What does the term "status quo" refer to? If a policy advocate does not correctly identify the cause of the problem we cannot predict which of the following?

  How can your firm turn this npv into cash today

Your firm has a risk-free investment opportunity where it can invest $160,000 today and receive $170,000 in one year. For what level of interest rates is this project attractive?

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