1. Right now, the spot market price of Uranium 308 is $33.09 per pound. Uranium, being rather difficult to store, incurs a storage cost of $1.63 per pound per year, payable in advance. The risk-free rate for all maturities (with continuous compounding) is 4.4% per annum. What should the one-year futures price for Uranium be?
2. The exchange rate between US dollars and Euros is currently $1.18/€. The risk free interest rate is currently 5.5% for US Dollar deposits, and 7.3% for Euro deposits. What should the price of Euros be on a six-month forward contract?
a. 1.1907
b. 1.1920
c. 1.1885
d. 1.1950
e. 1.1694
3. The exchange rate between US dollars and Euros is currently $1.31/€. The risk free interest rate is currently 7.6% for US Dollar deposits, and 3.1% for Euro deposits. The one-year futures price of Euros is 1.4623. Is there an arbitrage opportunity?
a. Yes, buy euros at 1.3100 and sell euro futures
b. Yes, buy euro futures and sell euros at 1.3100
c. Impossible to answer based on information given
d. no, there is no arbitrage opportunity here
4. The exchange rate between US dollars and Euros is currently $1.52/€. The risk free interest rate is currently 2.9% for US Dollar deposits, and 7.6% for Euro deposits. The one-year futures price of Euros is 1.3589. Is there an arbitrage opportunity?
a. Yes, buy euro futures and sell euros at 1.5200
b. no, there is no arbitrage opportunity here
c. Yes, buy euros at 1.5200 and sell euro futures
d. Impossible to answer based on information given
5. The exchange rate between US dollars and British Pounds is currently $1.7040/£. The risk free interest rate is currently 3.7% for US Dollar deposits, and 4.9% for GBP deposits. What should the price of GBP be on a three-month forward contract?
a. 1.7091
b. 1.7246
c. 1.7116
d. 1.7069
e. 1.6989
6. The S&P 500 stock index is currently standing at 1938.52 and the risk-free rate for all maturities (with continuous compounding) is 5.8% per annum. The index is expected to generate a dividend yield of 1.6% per annum. What is the six-month futures price?