Why the future price converges to the spot price

Assignment Help Financial Management
Reference no: EM131965866

1. Explain why the future price converges to the spot price? What would happen if this did not occur?

2. The geometric average of −18%, 35%, and 40% is _________.

14.25%

19.00%

15.72%

30.65%

3. Explain why it is important for an organization pay model to coincide with its strategic plan. Describe message a company can employ to make sure this occurs. Your response should be at least 230 words.

Reference no: EM131965866

Questions Cloud

Even though most corporate bonds : Even though most corporate bonds in the United States make coupon payments semiannually, what is the current price of the bond?
What is after tax cost of debt : What is ICU's pretax cost of debt? If the tax rate is 38 percent, what is the after tax cost of debt?
What is after-tax component cost of debt : What is Snale's after-tax component cost of debt for purposes of calculating the WACC?
Interest rates would cause the surplus to shrink to zero : Aproximately what change in interest rates would cause the surplus to shrink to zero? You can ignore convexity effects for this question.
Why the future price converges to the spot price : Explain why the future price converges to the spot price? What would happen if this did not occur?
What is the predicted impact on the return of your portfolio : What is the predicted impact on the return of your portfolio? What is the predicted impact on the return of the index?
What is the modified duration of each portfolio : What is the modified duration of each portfolio? Which portfolio has the greater amount of convexity and why?
A lot of people love a cup of high-quality coffee : A lot of people love a cup of high-quality coffee bought at their favorite coffee shop on a daily basis. How much would you accumulate by the time you retire?
What is present value of the annual cash flow : What is the present value of the annual cash flow that is expected in 5 years from today?

Reviews

Write a Review

Financial Management Questions & Answers

  Should the firm undertake the investment

We have a project which gives us $1 million net cash flow, which will continue for 5 years. Should the firm undertake the investment?

  Amount will the insurance company pay for the damages

What amount will the insurance company pay for the damages? What amount will Kurt have to pay?

  Purchase an investment that will generate annual cash flows

You have the opportunity to purchase an investment that will generate annual cash flows of $11,982 per year for the next 28 years. If your required rate of return on this investment is 23.45%, how much is the investment worth?

  How many days would the cash conversion cycle be changed

Cyree Inc. has annual sales of $80,000,000; its average inventory is $20,000,000; and its average accounts receivable is $16,000,000. The firm buys all raw materials on terms of next 35 days, and it pays on time. The firm is searching for ways to sho..

  Calculate the effect of waiting on the project risk

calculate the effect of waiting on the project's risk, using the same data. By how much will delaying reduce the project's coefficient of variation?

  How would you evaluate their performance

Imagine you have been tasked with evaluating a portfolio manager. How would you evaluate their performance? Share specific categories you would assess, what you would expect to see and any areas in which you allow leeway

  Calculate Company Es weighted average cost of equity

Calculate Company E’s weighted average cost of equity, given the following information: (a) Expected Return on the Market: 10%, (b) Beta for Company E: 1.11, (c) Expected Risk Free Rate of Return: 3%, (d) Debt: $10,000,000, (e) Equity: $8,000,000, an..

  Standard deviation of return on minimum variance portfolio

An investor can design a risky portfolio based on two stocks, A and B. The standard deviation of return on stock A is 25% while the standard deviation on stock B is 14%. The correlation coefficient between the return on A and B is 0.40. What is the s..

  How much was the firms earnings before taxes

How much was the firm's earnings before taxes (EBT)?

  Discuss which type of risk matters to investors

Discuss which type of risk matters to investors and Why.

  Compute the difference between forward rate and spot rate

Compute the difference between forward rate and spot rate. Is it a premium or discount at the beginning of year 2014 and 2015?

  Why can asset allocation be expensive

Why can asset allocation be expensive? How can you reduce the costs?- Where are stock options traded? What is the exchange's role in the trade?

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