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The one-year futures price on a particular stock-index portfolio is 406, the stock index currently is 400, the one-year risk-free interest rate is 3%, and the year-end dividend that will be paid on a $400 investment in the index portfolio is $5.
a. I have already got this problem solution. -----> Formulate a zero-net-investment arbitrage portfolio and show that you can lock in riskless profits equal to the futures mispricing.
b. I need to solution of this problem.------> Now assume (as is true for small investors) that if you short sell the stocks in the market index, the proceeds of the short sale are kept with the broker, and you do not receive any interest income on the funds. Is there still an arbitrage opportunity (assuming you don't already own the shares in the index)?
c. I need to solution of this problem.------> Given the short-sale rules, what is the no-arbitrage band for the stock-futures price relationship? That is, given a stock index of 400, how high and how low can the futures price be without giving rise to arbitrage opportunities?
An analysis of what happens to the estimate of the net present value when you examine a number of different likely situations is called _____
net present value npvproblem 11-1npvproject k costs 40000 its expected cash inflows are 12000 per year for 6 years and
an organizationrsquos culture can be defined as ldquothe unwritten set of rules and informal policies that direct
dear sir madam ltbrgt ltbrgtcan you please provide me the attached solution plagiarism free. looking forward to hear
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