Describe each employee economic status

Assignment Help Financial Management
Reference no: EM131915086

1. What is the annual income of three employees working 40 hours a week, earning $5.15, $7.25, $15.00 per hour? Using income guidelines for the state of Georgia, how would you describe each employee’s economic status? How does each annual salary compare to federal poverty guidelines?

2. Suppose that there is a forward contract on a non-dividend paying stock. The spot price of the stock is $80, and it would be either $85 or $78 in the next time period. The forward price is $83. The risk-free interest rate is constant at 5%. a. What is the value of the forward contract? b. Given the answer to (a), is there an arbitrage opportunity available? c. If there is an arbitrage opportunity, provide a strategy to exploit the arbitrage.

Reference no: EM131915086

Questions Cloud

What is constant growth dividend policy-advantages : What’s constant growth dividend policy? advantages? disadvantages? Any real-world example?
What is net outcome of hedge and cash activities combined : What is the net outcome of the hedge and cash activities combined? Show work.
Military is considering purchasing new transport helicopter : The military is considering purchasing a new transport helicopter. It is believed the helicopter will be needed for 14 years.
Determine interest rate used in computing project balance : Determine the interest rate used in computing the project balance. Enter your answer as a percentage between 0 and 100.
Describe each employee economic status : How would you describe each employee’s economic status? How does each annual salary compare to federal poverty guidelines?
Using the prospective method or view : After 5 years using the prospective method or view.
What will annual costs be when each of two children : What will annual costs be when each of the two children starts college at age 18?
What is the duration of bond with four years to maturity : What is the duration of a bond with four years to maturity and a coupon of 8.6 percent paid annually if the bond sells at par?
Determine interest rate used in computing project balance : Determine the interest rate used in computing the project balance. Enter your answer as a percentage between 0 and 100.

Reviews

Write a Review

Financial Management Questions & Answers

  Mutual fund tracking-expiration date-strike price-quality

A $1 billion mutual fund tracking the s&p 500 index. The index currently trades at 2000. In order to protect the fund against an index decline beyond 10% in a year. ie, the value of the fund in a year mush be above 900m. What forward or option positi..

  Risk-free rate have to for two stocks to correctly priced

Stock Y has a beta of .9 and an expected return of 12.6 percent. Stock Z has a beta of .6 and an expected return of 8.9 percent. What would the risk-free rate have to be for the two stocks to be correctly priced?

  Estimate that a required rate of return

You are considering the purchase of crown bakery inc. Common stock that just paid a dividend of $20 per share. You expect the dividend to grow at a rate of 5.28 % per year, indefinitely. You estimate that a required rate of return of 12.25 percent wi..

  Debited to cost of goods sold account

With perpetual LIFO, the last costs available at the time of sale are first to be removed from Inventory account and debited to Cost of Goods Sold account.

  Division is considering two investment projects

Your division is considering two investment projects, each of which requires an up-front expenditure of $19 million.

  Capital structure consists solely of debt and common equity

Hook Industries' capital structure consists solely of debt and common equity. What percentage of the company's capital structure consists of debt?

  What is expected return on stock

Assuming both stocks are correctly priced, what is the expected return on stock B?

  Responsible for spades sale of defective goods

Sam Spade sold Bart Black goods on credit for $1,000. Spade then assigned the account receivable to Arte Ashe. Black discovered that the goods were defective--and told Ashe they were worth only $300. Ashe demanded $1,000 from Black because, said he, ..

  What is the present value of this cash flow pattern

You have been offered the opportunity to invest in a project that will pay $2,234 per year at the end of years one through three and $12,593 per year at the end of years four and five. If the appropriate discount rate is 17.1 percent per year, what i..

  Balance in retained earnings for triplette

What is the year-end 2008 balance in retained earnings for Triplette?

  What is the approximate variance of returns for a security

What is the approximate variance of returns for a security if the expected returns are -4.0%, 6.0%, and 15.0%, and the probabilities of occurring are 0.40, 0.30, and 0.30, respectively? A. 470 B. 63 C. 30 D. 961

  What is total cost of the line of credit

Your client is a biochemist who has discovered a technique to create a new biofuel. He estimates it will take him 2 years to make it economically feasible at a cost of $2,000,000. Assume that loan is set up as interest-only (meaning any accrued inter..

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