Calculate the price of a forward contract, Microeconomics

Commodities

A)

It is well documented that commodity prices are very volatile when compared to other asset classes.  Discuss factors that cause volatility in the commodity markets.

5B)

For the following questions assume the risk free rate of return is 2.50%

Your company imports large quantities of oil.  On January 1st 2011 the spot price of oil is $70.  You are concerned that recent events will drive the price of oil higher in 90 days time when you will need to purchase a large quantity. Under these circumstances calculate the price of a forward contract. In 90 days time the spot price of oil is $125; calculate the profit or loss of your forward position.

What is the 10 month forward price of a dividend security based on the following information:

Current price

$110.00

Quarterly dividend

$1.00

Dividend payment dates:

3M, 6M, 9M

Posted Date: 2/19/2013 12:12:29 AM | Location : United States







Related Discussions:- Calculate the price of a forward contract, Assignment Help, Ask Question on Calculate the price of a forward contract, Get Answer, Expert's Help, Calculate the price of a forward contract Discussions

Write discussion on Calculate the price of a forward contract
Your posts are moderated
Related Questions
What is the difference between GDP and GNP?  Gross domestic product (GDP) is the value of the total final output formed inside a country, during a given year. GDP, like all mea


discuss how economic theory of marginal utility explains the optimum pattern of consumption for an individual consumer

CURRENCY UNIONS AND OPTIMUM: This Section explains the working of monetary unions and common currency areas. The Section also examines the case for and against optimum currenc

Steel and aluminum production Steel Canada 500, France 1200 Aluminum Canada 1500, France 800 The maximum amount of steel or aluminum that Canada and France can produce if they full

PEST analysis Political factors: The political factors include laws and regulations in the market and this influences the market activities. These laws and regulations a

what does General Equilibrium in consumption means?


#quesUse a graphical illustration to describe briefly what the influence of each of the following would be on the market supply of labor:(a) an increase in immigration (b) more wom

discuss whether marginal utility is a realistic piece of economy analysis in a consumer demand