What is the risk-free price that she can guarantee herself

Assignment Help Financial Management
Reference no: EM131506507

Suppose a farmer is expecting that her crop of oranges will be ready for harvest and sale as 150,000 pounds of orange juice in 3 months time. Suppose each orange juice futures contract is for 15,000 pounds of orange juice, and the current futures price is F0=118.65 cents-per-pound. Assuming that the farmer has enough cash liquidity to fund any margin calls, what is the risk-free price that she can guarantee herself. Please submit your answer in cents-per-pound rounded to two decimal places. So for example, if your answer is 123.456, then you should submit an answer of 123.47.

Reference no: EM131506507

Questions Cloud

What is the bond yield to maturity and bond current yield : The bond is currently trading at a price equal to 105% of par value. What is the bond's yield to maturity? What is the bond current yield?
Calculate the annual holding period return on each security : Information about three securities appears below. Assuming interst and dividens are paid annually, calculate the annual holding period return on each security.
Considering abandoning the business : The owners of Egg Sauce,Ltd. are tired of their business. In fact, they are so exhausted that they are considering abandoning the business.
Expansion project that requires an initial fixed asset : Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.55 million.
What is the risk-free price that she can guarantee herself : Assuming that the farmer has enough cash liquidity to fund any margin calls, what is the risk-free price that she can guarantee herself.
What is his monthly payment : The interest rate is 6% annually with monthly compounding. What is his monthly payment?
Bond ratings classify bonds based : Bond ratings classify bonds based on:
Nuclear decommissioning fund : Utilities which operate nuclear power plants are required to place funds into a "Nuclear Decommissioning Fund"
Calculating payback : Calculating Payback.

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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