What is the gain-ignoring transactions costs

Assignment Help Financial Management
Reference no: EM131535198

Assume that a futures contract on Treasury bonds with a face value of $100,000 is purchased at 92-20. If the same contract is later sold at 94-12, what is the gain, ignoring transactions costs? Note: These Treasury bond prices are quoted in 32nds of a point.

Reference no: EM131535198

Questions Cloud

Accelerated depreciation methods : The manager of a Glidden Paint manufacturing plant is aware that MACRS and BBD are both accelerated depreciation methods;
Recommend for global managers to address ethnocentrism : What strategies would you recommend for global managers to address ethnocentrism?
What is the lira forward discount or premium : Turkish interest rate is 6.5 percent, and the 1-year U.S. interest rate is 5.3 percent, what is the lira's forward discount or premium?
What is the firm market capitalization : What is the firm’s Market Capitalization? What is the cost of the preferred stock? What is the cost of the common stock?
What is the gain-ignoring transactions costs : If the same contract is later sold at 94-12, what is the gain, ignoring transactions costs?
Corporation issued-what is the price of the bond : XYZ Corporation issued a 10 year bond 2 years ago with 5.75% coupon at par. If the current required return on this bond is 4.35%, what is the price of the bond?
Calculate the firm weighted average cost of capital : Calculate the firm’ weighted average cost of capital for the Collins Company assuming the firm has exhausted all retained earnings.
Determine sherry profit or loss : Sherry closed out her position by selling a Treasury bills futures contract for 95.64. Ignoring transaction costs, determine Sherry's profit or loss.
Computing component cost of bonds : Explain why after-tax costs are utilized when computing component cost of bonds, but not preferred and common stock.

Reviews

Write a Review

Financial Management Questions & Answers

  A large role in higher education financing

Seven in ten students attending publicly funded universities leave the state after graduation, indicating that a very large fraction of states' investments in human capital bears fruit elsewhere.- Why might states still play such a large role in h..

  Firm is concerned about its currency risk

The U. S- based MNC Kline has payables of CHF 250,000 in nine months. The firm’s economist forecasts that the CHFUSD could end the period with a value of either 1.10 (probability of 55 percent) or 1.00 (45 percent). The firm is concerned about its cu..

  What is the net return to investors

Consider a mutual fund with 140 million dollars in assets at the start of the year, and 29 millon shares outstanding. If the gross annual return last year was 14.7 percent, and the fund charges a total expense ratio of 1.2 percent of end-of-year valu..

  Use the ERR method to evaluate the project

use the ERR method to evaluate the project.

  Choice of undertaking a project

A firm has a choice of undertaking a project now or next year. The cash flows in the two cases are as follows.

  Why would carson use the given approach

Carson Ltd uses sensitivity analysis that allows for alternative exchange rate scenarios. Why would Carson use this approach rather than using the pegged exchange rate as its exchange rate forecast in every year?

  The plowback ratio is

The plowback ratio is:

  Calculate cost of each capital component for past three year

Calculate the cost of each capital component for the past three years on Walmart. After-tax cost of debt, cost of preferred, and cost of equity with the DCF method and CAPM method. What do you estimate the company's WAAC?

  Preferred stock outstanding

Bullseye, Inc.'s 2008 income statement lists the following income and expenses: EBIT = $703,500, Interest expense = $53,000, and Taxes = $220,500. Bullseye's has no preferred stock outstanding and 270,000 shares of common stock outstanding. What are ..

  About predicted weather patterns-severe storm safety tips

The Foggy Futures Weather Network offers an annual almanac for sale each year with information about predicted weather patterns, severe storm safety tips, and a tracking chart. The finished product sells for $ 35 with a variable cost per unit of $21...

  What is the length of the inventory period

Stoney Brooke, Inc. has sales of $1,000,000 and cost of goods sold of $734,700. The firm had a beginning inventory of $39,000 and an ending inventory of $54,000. What is the length of the inventory period?

  Examine the financial analysis methods

Report on assets and liabilities, cash flows and financial position (Financial Statements). Examine of financial analysis methods (Financial Analysis Methods).

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