Determine the futures price for a four-month contract
A stock index currently stands at 350. The risk-free interest rate is 8% per annum (with continuous compounding) and the dividend yield on the index is 4% per annum. What should the futures price for a 4-month contract be?
Now Priced at $5 (50% Discount)
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A futures contract is used for hedging. Explain Why the marking to market of the contract can give rise to cash flow problems.
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The new, turn-around management team at AJ's Pizza intentionally overestimates significantly the amount of its write-downs of assets in order to record a nonrecurring loss in a period of already depressed income.
The risk-free interest rate is 8% per annum (with continuous compounding) and the dividend yield on the index is 4% per annum. What should the futures price for a 4-month contract be?
An essay from a legal and ethical point of view, moral aspect and also consider stakeholders, customers and the companies personal interest.
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What will this do to the value of the dollar with respect to foreign currencies? What is the corresponding effect on foreign investments in the United States?
The index is currently 1,500 and one contract is for delivery of $50 times the index. The beta of the stock is 1.3. What strategy should the investor follow?
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