Determining the forward contract

Assignment Help Business Management
Reference no: EM131104466

A certain commodity sells for $130 today. The present value of the cost of storing this commodity for one year is $9. The risk-free rate is 3%. What is a fair price for a 1-year forward contract on this asset?

A. $146.29

B. $133.27

C. $143.17

D. $138.66

E. $152.66

Reference no: EM131104466

Questions Cloud

Identify the type of quantitative research design used : Evaluate the research questions and hypotheses using the Research Questions and Hypotheses Checklist as a guide and Identify the type of quantitative research design used and explain how the researchers implemented the design
Describe the market process : Picture the used car market: Cars are either high, medium, or low quality. To buyers, high quality cars (which never break down) are worth $8,000, medium quality cars (which sometimes break down) are worth $5,000, and low quality cars (which often br..
Business intelligence and business analytics : Describe the decision-making process and how good information systems support business intelligence and business analytics. Use a present day organization, and discuss the business intelligence and analytics used by the organization.
How much should she charge in order to make the most money : Nicole sells cupcakes. She knows that if she charges $1 per cupcake, she will be able to sell 100 cupcakes. She also knows that if for every 25 cents she raises the price, she will lose ten customers. How much should she charge in order to make the m..
Determining the forward contract : A certain commodity sells for $130 today. The present value of the cost of storing this commodity for one year is $9. The risk-free rate is 3%. What is a fair price for a 1-year forward contract on this asset?
Prepare a brief report that the firm''s executives : Tropical Sweets will replicate the original project only if demand is high. Using decision tree analysis, estimate the value of the project with the growth option.Assume you have just been hired as a financial analyst by Tropical Sweets Inc.prepare a..
Distinguishing between operating and non operating items : What is the basis for distinguishing between operating and non-operating items?
Price level changes significantly as result of tax cut : Suppose that Congress enacts a significant tax cut with the expectation that this action will stimulate aggregate demand and push up real GDP in the short eun. In fact, however, neither real GDP nor the price level changes significantly as a result o..
Amount of goodwill involved in transaction : An acquiring firm is willing to pay a 35 percent premium for a target firm's shares, currently selling at $40 per share. The target has one million shares outstanding, current assets of $9 million, fixed assets of $80 million, and liabilities of $..

Reviews

Write a Review

 

Business Management Questions & Answers

  Strategy and strategic practices of a real organisation

strategy and strategic practices of a real organisation

  Case study of us navy

Mark Womer and Brian Perry were members of the U.S. Navy and were stationed in Newport, Rhode Island. On April 10, Womer allowed Perry to borrow his auto-mobile so that Perry could visit his family in New Hampshire.

  What are the importance of and measurement of patient

what are the importance of and measurement of patient satisfaction in the evaluation of u.s. health care? in your view

  Should one specific business requirement drive an info

Should one specific business requirement drive an Information System's development or should the business include many business requirements and develop a system that handles all the requirements? Why or why not and what system would you recomm..

  The seven tests of just cause

Employee and Labor Relations Chapter 12 Determine if each of the following scenarios meet "the seven tests of just cause" in an arbitration dispute. Explain your answers. Scenario 1: Angie was fired, as other employees have been, for eating a tomato ..

  Environment crisis or hype for the marketglobal warming is

environment crisis or hype for the marketglobal warming is a topic that has been on the news. in your own words do you

  Enterprising managers of the future

The audience for the Briefing is the Senior Management team of a large global company, who are looking for ways to develop the young ‘enterprising managers of the future' in their organisation.

  Employee retention rates in car dealer industry

Prepare a summary of your findings. Comment on whether attrition rates in the retail industry are higher than other industries and explain why. Properly cite your sources in your paper.

  Market commonality and resource similarity

Determine what additional steps Apple's competitors are likely to take and how Apple will most likely respond. Explain your rationale.

  Which of the following is the manager learning

A restaurant manager discovers one of his employees eats at another restaurant down the street a couple nights each week. Which of the following is the manager learning about this employee?

  Show academic proffessional success

Discussion board post, draft an email that you would send in response to the scenario chosen being sure to indicate the recipients intended.

  Explaining the creditability of new business venture

The bank has requested from you to submit a business proposal explaining the creditability of your new business venture and how it will succeed.

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