Given the following information, what would you expect to be the minimum price at which a 3 month futures contract for 100 bushels of wheat would be trading? • The spot price of wheat is $8 per bushel. Storage and insurance costs for wheat are $.50 per 100 bushels, per month, payable at the end of the storage period. You can borrow money at 8% per year. a) $865.50 b) $814.50 c) $816.50 d) $817.5

Given the following information, what would you expect to be the minimum price at which a 3 month futures contract for 100 bushels of wheat would be trading? • The spot price of wheat is $8 per bushel. Storage and insurance costs for wheat are $.50 per 100 bushels, per month, payable at the end of the storage period. You can borrow money at 8% per year. a) $865.50 b) $814.50 c) $816.50 d) $817.5

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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At a point in time, the asked (discount yield) of a 10,000 T-Bill is o.9%. How much is the price of this bill if the settlement date is on 77 days?
Heba is expecting to get OMR 50000 at the end of 5 years. How much will be the value today if: Option a: The discount rate is 9.02% half yearly Option b: The discount rate is 128% quarterly Select one: a. Option a: 32000.25 Option b: 36000.55 b. Option a: 650o0.35 Option b: 4900245 c. Option a: 32500.20 Option b: 32000.50 d. Option a: 32165.59 Option b: 32009.50
Table 2.7 Corn futures prices on the Chicago Mercantile Exchange, January 3, 2019 Maturity Last Mar-19 May-19 Jul-19 Sep-19 Dec-19 Mar-20 Change High 3.8025 0.7500 3.8075 3.7975 3.8800 0.5000 3.8800 3.8750 3.9500 0.2500 3.9525 3.9450 3.9700 0.0000 3.9700 3.9650 4.0075 -0.5000 4.0100 4.0025 4.0975 0.0000 4.1000 4.0950 Low Source: www.cmegroup.com.
Suppose that you bought two one-year gold futures contracts when the one-year futures price of gold was US$1,340.30 per troy ounce. You then closed the position at the end of the sixth trading day. The initial margin requirement is US$5,940 per contract, and the maintenance margin requirement is US$5,400 per contract. One contract is for 100 troy ounces of gold. The daily prices on the intervening trading days are shown in the following table. Day Settlement Price 0 1340.30 1 1345.50 2 1339.20 3 1330.60 4 1327.70 5 1337.70 6 1340.60 Assume that you deposit the initial margin and do not withdraw the excess on any given day. Whenever a margin call occurs on Day t, you would make a deposit to bring the balance up to meet the initial margin requirement at the start of trading on Day t+1, i.e., the next day. b. Fill the appropriate numbers in the blank cells in the following table. (Hint: See solution to Q19 in Lesson 2 Learning…
The beta of M Simon Inc., stock is 1.6, whereas the risk-free rate of return is 0.06. If the expected return on the market is 0.15, then what is the expected return on M Simon Inc? Round to four decimal places.
Suppose the price of wheat over the next year is expected rise to $3.50 in the United States and to £1.60 in England. What should the one-year $:£ forward rate be
Can you please help with the question in the picture attached? The answer should be only one and I’m quite confused. Thank you!
A farmer sells one corn futures contract at a price of $5.84 per bushel. The spot price of corn drops to $4.65 when the contract expires and the farmer delivers her corn. If the farmer harvested 24,000 bushels of corn and had futures contracts on 20,000 bushels of corn, what is the farmer's net proceeds when corn is sold?
Kindly show the solution please, thanks!
Plz answer very soon
The spot price of silver is $30 per ounce. The storage costs are $0.25 per ounce per year payable quarterly in advance. Assuming that interest rates are 7% per annum for all maturities, calculate the futures price of silver for delivery in 10 months.
Assume that Epping Co. expects to receive S$500,000 in one year. Epping created a probability distribution for the future spot rate in one year as follows: Future Spot Rate $.68 Probability 20% 62 50 30 61 Assume that one-year put options on Singapore dollars premium of $.04 per unit. One-year call options on Singapore dollars are available with an exercise price of S.60 and a premium of $.03 per unit. a are available, with an exercise price of $0.63 and Use the appropriate options hedge to determine whether the firm would exercise the option using each of the three different spot rates i.e. what would the firm do if each spot rate existed at the time it is considering exercising the option (assume the option is about to expire). Then, show the total amount of receivables (in US dollars) based on the appropriate strategy that would be implemented for each of the three spot rates. Indicate whether the amount would be a maximum or a minimum or neither.

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