Make your net price different from weighted forward price

Assignment Help Financial Management
Reference no: EM131320425

If you placed a hedge on any given commodity and the hedge was perfect, the net price would be a weighted average price (index) of the forward price and the cash price. Describe how the real world would make your net price different from the weighted forward price (index).

Reference no: EM131320425

Questions Cloud

Calculate the arithmetic average returns and the variances : Returns Year X Y 1 18 % 15 % 2 21 33 3 12 14 4 – 14 – 19 5 10 23 Using the returns shown above, calculate the arithmetic average returns, the variances, and the standard deviations for X and Y.
Company issues a? ten-year bond at par with coupon rate : A company issues a? ten-year bond at par with a coupon rate of 6.6?% paid? semi-annually. The YTM at the beginning of the third year of the bond? (8 years left to? maturity) is 7.7?%. What is the new price of the? bond?
Calculate the size of the fund at the end of the four years : our company has decided to set up a welfare fund with an initial payment of Ghc 275m which is compounded six-monthly over a four-year period at 20% per annum. Calculate the Size of the fund at the end of the four years. An entrepreneur purchased a pi..
Find effective annual rate of interest : In three years time, a considerable number of the plant and machinery in your company’s factory will need replacement. As the finance director of your company, you have estimated the amount of money that will be required for purchasing the replacemen..
Make your net price different from weighted forward price : If you placed a hedge on any given commodity and the hedge was perfect, the net price would be a weighted average price (index) of the forward price and the cash price. Describe how the real world would make your net price different from the weighted..
Is foreign exchange reserves critical variable : Is Foreign exchange reserves critical variable in a country's macro economic management? explain why and give examples of how a country can retain reserves.
Discount rate used to determine net present value of project : If a project's NPV is greater than zero, then the. The discount rate used to determine the net present value of a project is the. if a project's NPV is less than zero, then its IRR must be less than the WACC. The NPV of a relatively low-risk project ..
Company will maintain this dividend for the next six years : Burkhardt Corp. pays a constant $13.90 dividend on its stock. The company will maintain this dividend for the next six years and will then cease paying dividends forever. If the required return on this stock is 11 percent, what is the current share p..
What is the expected capital gain from the sale of stock : what is the expected capital gain from the sale of this stock at the end of the coming? year?

Reviews

Write a Review

Financial Management Questions & Answers

  Why is it important for international firms to understand

Identify some political and currency risks of Spain and discuss why a U.S. company would invest in that country. Also discuss some of the various international finance topics such as the foreign exchange market, purchasing power parity, interest rate..

  Relationship between yield to maturity and bond prices

Which of the following statements about the relationship between yield to maturity and bond prices is false?

  What is the projects expected NPV in thousands of dollars

Drilling Experts, Inc. (DEI) finds and develops oil properties and then sells the successful ones to major oil refining companies. DEI is now considering a new potential field, and its geologists have developed the following data, in thousands of dol..

  What is the companys degree of operating leverage

The following is from Alsatia Corporation's financial statement information for last month: The company has no beginning or ending inventories and produced and sold 10,000 units during the month. What is the company's break-even in units? How many un..

  How can investments in stock increase your wealth

How can investments in stock increase your wealth? How would you calculate the value of a stock investment of a single sum over time?

  How much will street have to deposit in planning account

James Street's son, Harold, is 10 years old today. Harold is already making plans to go to college on his 18th birthday, and his father wants to start putting money away now for that purpose. Any balance remaining in the account will continue to earn..

  Let v be a vector space with dimension n

Let V be a vector space with dimension n > 0. If i is an integer such that 0 % i % n, prove that V contains at least one subspace U such that dim (U) = i.

  Depreciation schedule for machine is straight-line

Niko has purchased a brand new machine to produce its High Flight line of shoes. The machine has an economic life of five years. The depreciation schedule for the machine is straight-line with no salvage value. Assume that the corporate tax rate is 3..

  Natural gas unit was expected to have the energy cost

At NYIT in 1993 a 100ton electric A/C system (electric driven compressor) with a 100 ton natural gas absorption system. Electric then was$. 12/kwh and the natural gas unit was expected to have the energy cost.

  Activity-based costing system with three activity cost pools

Abagail Corp. uses activity-based costing system with three activity cost pools. The following information is provided: Costs: Wages and salaries $ 202,000 Depreciation 102,000 Utilities 112,000 Total $440,000 Activity Cost Pools Assembly Setting Up ..

  Cost of the party as an entertainment expense

Evander, an officer in the Marine Corps, was appointed commanding officer of the Marine training base in Beaufort, S.C. As is customary in connection with changes in command, he hosts a party at his home for officers and guests the night before he as..

  Draw a carefully labelled cash flow diagram

Draw a carefully labelled cash flow diagram to represent the above financial transactions.-  What is the instalment amount?

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