User Account

All Pages

What is the value of the contract the investor

Assignment Help Finance Basics
Reference no: EM131872181

An investor enters into a forward contract to buy 5,000 barrels of oil at $80 a barrel in three months. Two months later, suppose that the spot price for oil is $83 a barrel, and the one-month interest rate is 1 % continuously compounded. Assuming that there are no storage costs, what is the value of the contract the investor holds after two months?

Reference no: EM131872181

Questions Cloud

Fern component cost of preferred stock : Fern has preferred stock selling for 94.0 percent of par that pays an 9.0 percent annual coupon. What would be Fern's component cost of preferred stock?
What is the average full cost per unit : What is the average full cost per unit if next year the production fails to 86,000 units and there is no change in the unit prices
What is ice co cost of equity : Ice Co stock has a beta of 1.89, the current risk-free rate is 5.14 percent, and the expected return on the market is 15.14 percent.
What were reasons for disappearance of many civilizations : What were the reasons for the disappearance of many civilizations across world and how did Egypt and China manage to sustain their civilization for longer term?
What is the value of the contract the investor : Assuming that there are no storage costs, what is the value of the contract the investor holds after two months?
What is the value of the existing fra contract : What is the value of the existing FRA contract to the buyer if the five-month Libor rate at this point is 5%?
What is the average annual rate of return : Sixty years ago, your mother invested $4,500. Today, that investment is worth $430,065.11. What is the average annual rate of return
Identifies and briefly describes the issue you have selected : Identifies and briefly describes the issue you have selected. Describes, in at least one paragraph, your own perspective and values surrounding this issue.
Contract the underlying libor for six months : Consider a 6×12 FRA where the underlying six-month period is 183 days and the notional is $100. The FRA fixed rate is 5%.

Reviews

Write a Review

Finance Basics Questions & Answers

  What are steps required in conducting sensitivity analysis

What are two methods for developing optimistic and pessimistic scenarios? Explain each.

  Would you want to have your genes tested

Would you want to have your genes tested to know if you are at risk for a disorder?

  The pancake corporation recently paid a 3 dividend and is

the pancake corporation recently paid a 3 dividend and is expected to grow at 5 forever. investors generally require an

  Write three needs of sec financial performance reporting

what are the different forms of business organization and briefly discuss each ones advantages and disadvantages?

  One or more foreign stock exchanges

Many foreign companies like to cross-list their stocks on one or more foreign stock exchanges. How do cross listed stocks differ from ADRs and other depository-receipt securities? Find a cross-listed stock trading on one of the US stock exchanges...

  What rate of return would joan have earned for the past year

Last year, Joan purchased a $1,000 face value corporate bond with an 7% annual coupon rate and a 25-year maturity. At the time of the purchase, it had an expected yield to maturity of 13.99%.

  What advice do you have for her

She wants to get as many shares in the IPO as possible and would even be willing to buy the shares in the open market immediately after the issue. What advice do you have for her?

  Describe the sequence of events in a financial crisis

Describe the sequence of events in a financial crisis and explain why they can cause economic activity to decline

  What is organizational politics all about why do people

what is organizational politics all about? why do people tend to see organizational politics as negative? could an

  Which of the following is not normally regarded as being a

which of the following is not normally regarded as being a barrier to hostile takeovers?abnormally high executive

  Determine the efficient frontier of risky assets

Describe the method to determine the efficient frontier of risky assets when short selling is allowed and when it is not allowed

  Evaluating annuity amounts

What amount is needed to be invested today at 6% Per annum, compounded semiannually, to equal $17,000 10 years from now? What amount is needed to be invested for the 2 1/2 years at 8% per annum, compounded quarterly to equal $5,000?

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