The January 2023 S&P 500 cash index is 3950 points while the S&P 500 futures March 2023 index is 4000 and the contract value of each index point is $150. You are convinced the futures market will fall 20% by expiry. You are only prepared to buy or sell one futures contract.
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- 4. EncryptCo is a Canadian company considering an international contract with a firm in the nation of Iceberg. The contract will last 5 years. It will involve the construction of an electrical generator for a residential area in Iceberg's largest city, Snowville. Iceberg's national currency is the blizzar. The table below contains data for the project. Complete this question using Excel. Include the output onto your solution and please ensure that it fits onto a page. First Cost (Blizzars) Net Revenue 2022 to 2027 (Blizzars) Expected Iceberg Inflation Rate Value of the Blizzar VS Canadian dollar in 2022 ($) Expected annual rate of decline of the value of the Blizzar VS the Canadian dollar Expected Inflation in Canada EncryptCo's Real MARR 1,800,000 550,000 10% $1.25 5% 6.5% 15% (a) Find the present worth of the project assuming no inflation. (b) Find the present worth of the contract using the above inflation rates. (c) Should EncryptCo pursue the project given the above inflation…Benjamin receives an annual bonus of $1,000 and wants to invest it in an account that earns interest for the next 3 years. Below are the two options that he is considering putting his money into. Which of the following statements is true? NEED ASAP PLS. Benjamin receives an annual bonus of $1,000 and wants to invest it in an account that earns interest for the next 3 years. Below are the two options that he is considering putting his money into. Which of the following statements is true? Bank A 5% Simple Interest Bank B 5% Interest Compounded Annually Simple Interest: /= Prt; Compound interest A=P(1+r): After 3 years, Bank B will pay Benjamin $1875 more than Bank B. After 3 years, Bank B will pay Benjamin $3000 more than Bank A. After 3 years, Bank B will pay Benjamin $1007.63 more than Bank A. After 3 years, Bank B will pay Benjamin $7.63 more than Bank A. After 3 years, Bank A will pay Benjamin $10.13 less than Bank B.True or False 1. If a certain present value P is amortized into 10 equal payments, then the future worth F will always be greater than10 times the present worth for all values of i. 2. A zero profit implies that this is a breakeven point, and the amount of demand equals the amount of supply.
- You have just purchased a 5-year FRN with a face value of 100 that pays SORF. The interest rate is 2% right now. Two years later interest rates have increased to 4%. What is the value of the FRN? You are about to sign an interest swap to pay fixed and receive floating. The quote is 4.5-4.7% against LIBOR flat. The principal is 100,000. What is the value of the swap? (please use a fixed rate to discount the cash flows.) Round to the nearest US cent (2 decimal places).Lourdes Corporation's 12% coupon rate, semiannual payment, $1,000 par value bonds, which mature in 30 years, are callable 3 years from today at $1,050. They sell at a price of $1,187.45, and the yield curve is flat. Assume that interest rates are expected to remain at their current level. What is the best estimate of these bonds' remaining life? Round your answer to the nearest whole number. years If Lourdes plans to raise additional capital and wants to use debt financing, what coupon rate would it have to set in order to issue new bonds at par? Since interest rates have risen since the bond was first issued, the coupon rate should be set at a rate above the current coupon rate. Since the bonds are selling at a premium, the coupon rate should be set at the going rate, which is the YTC. Since the bonds are selling at a premium, the coupon rate should be set at the going rate, which is the YTM. Since Lourdes wishes to issue new bonds at par value, the coupon rate set should be the…A baseball team has signed a draft pick to a two year contract. The player's expectedmarginal revenue product in year 1 and year 2 are $1-million and $1.7-millionrespectively. The contracted wage is $1.3-million in the first year. The interest rate is7% each year. The competitive wage in year 2 is expected to be $1.8-million. If theteam is indifferent about the player resigning with it at the end of his contract, howmuch will they pay him in the second year? Use a$ and commas.
- a-What are the five factors that affect an option's price? b-Discuss the impact of time to expiration on the option price by explaining to the graph below. Call pre Put price 10 OR69 12 15 18 21 24 27 30 3 24s 4 SI 54 57 6e Time te ration monthTDS and monitoring, with respect to technology forecasting. Is one of greater value in technology forecasting or do they share an equal footing?Ashraf wants to buy a car for which he has been saving and investing in a bank an amount of OMR. 1000 each year for 10 years. He is willing to withdraw and buy a new car today. What amount will he receive assuming an interest rate of Option a : 7% Option b: 9%? Select one: O a. Option a: 5499.70 Option b: 6983.05 O b. Option a: 7023.58 Option b: 6417.65 O c. Option a: 4087.29 Option b: 6235.20 O d. Option a: 6487.80 Option b: 6157.08
- User passwords for the mainframe at a finance firm consists of five letters followed by two numbers. How many different passwords are possible? a. 33,153,120,000 Ob. None of these Oc. 1,188,137,600 Od 657,800 e. 7,893,690What is the current value of a security that pays $500 per year for 7 years if similar investments now earn 12%The YTM on a bond is the interest rate you earn on your investment if interest rates don't change. If you actually sell the bond before it matures, your realized return is known as the holding period yield (HPY). (Round the final answers to 2 decimal places.) a. Suppose that today you buy an 9.2% annual coupon bond for $1,180. The bond has 19 years to maturity. What rate of return do you expect to earn on your investment? Expected rate of return % b-1. Two years from now, the YTM on your bond has declined by 1%, and you decide to sell. What price will your bond sell for? (Omit $ sign in your response.) Bond price $ b-2. What is the HPY on your investment? HPY %