Create an intermarket hedge betting

Assignment Help Finance Basics
Reference no: EM133058500

Create an intermarket hedge betting that technology stocks will outperform finance stocks from now until August. Technology stock futures with September delivery date are currently trading at 650 and have a beta of 2. Finance stock futures with a September delivery date are currently trading at 209 and have a beta of 0.9. What is your profit on August 15th if you close out your positions with Technology futures at 703 and finance futures at 192? Both futures have a $100 multiplier.

Provide your answer rounded to two decimals.

Reference no: EM133058500

Questions Cloud

Abbie payback analysis of project : Which one of the following statements is correct concerning Abbie's payback analysis of this project?
Characteristic determinants of bond interest rates : Describe and evaluate the characteristic determinants of Bond interest rates.
What is irr : "Twice your money back, yes twice!' says the advertisement. If you believed it and invested $1000 and the firm promised you eight equal installments of $250 and
Same rate without tarnsaction costs : If she can reinvest at the same rate without tarnsaction costs what will her investment have grown to after 15 years?
Create an intermarket hedge betting : Create an intermarket hedge betting that technology stocks will outperform finance stocks from now until August. Technology stock futures with September deliver
Repurchase agreements questions : Suppose a manager wants to borrow $50 million of a Treasury security that it plans to purchase and hold for 20 days. The manager can enter into a reverse repo a
Determine the tax consequences of the cash distribution : Kings Corporation is a calendar year taxpayer. Susan owns all of its stock. Her basis for the stock is $6,000. Determine tax consequences of cash distribution
Calculate the weighted average cost of capital : The common stock and debt of Android Corp. are valued at $56 million and $36 million, respectively. Investors currently require a 14% return on the common stock
Calculate the value for oakstar : Using an asset-based approach, calculate the value (net of debt) for Oakstar.

Reviews

Write a Review

Finance Basics Questions & Answers

  Explain the things that someone should be aware

Put overwriting is the practice of writing put options against stock you own rather than the more common practice of writing covered calls.  Explain the things that someone should be aware of before doing this, including the best and worst things tha..

  Find the standard deviation of the investor new portfolio

Consider a mutual fund Z that invests 30% of its assets in the risk-free asset and 70% in stock A that has an expected return of 7% and a standard deviation

  What is the economic order quantity

a. What is the economic order quantity? b. What is the maximum inventory of IV solution bags?

  Compute hpr and hpy on stock investment

During the year, you received a cash dividend of $1.50 a share. Compute your HPR and HPY on this stock investment.

  Corporate admin and risk management

Describe the risk management framework that Kopie Kopie can use in order to mitigate the risk of potential losses arising from the future aggressive marketing

  From the following details compute i gross profit ratio ii

from the following details compute i gross profit ratio ii stock turnover ratio and iii operating

  How much will sarah have to invest today

How much will Sarah have to invest today? What if Sarah were a finance major and learned how to earn a 14% annual return? How soon could she then retire?

  Considering genesisrsquos aggressive growth plan sensible

considering genesisrsquos aggressive growth plan sensible essentials suggested that its client should broaden the scope

  Identify the company with cheaper shares

a) Using the P/E ratio, identify the company with cheaper shares and briefly explain why. Ignore risk.

  Calculate total of consolidated revenues

Jarel purchased 80% of the outstanding voting stock of Suarez for $260,000. Of this payment, $20,000 was allocated to equipment that had been undervalued on Suarez's books by $25,000.

  What is the unlevered value of operations

What is the unlevered value of operations? What is the value of the tax shield? Round your answer to two decimal places. Do not round intermediate calculations.

  Best estimate of the cost of equity

The market risk premium is 8% and T-bills are yielding 2.5%. The company's most recent dividend

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