Sell specified asset at agreed-upon price

Assignment Help Financial Management

Reference no: EM131087671

A financial contract that gives its owner the right, but not the obligation, to buy or sell a specified asset at an agreed-upon price on or before a given future date is called a(n) _____ contract.

A. option B. forward C. notional principle D. futures E. swap

Reference no: EM131087671

Questions Cloud

What is the initial net cash flow of the machine : Mars, Inc. is considering the purchase of a new machine, which will reduce manufacturing costs by $5,000 annually. Mars will use the MACRS (5-year class) method to depreciate the machine, and it expects to sell the machine at the end of its 5-year li..

What is the risk-free rate of return and standard deviation : The markets in general are paying a 3% real rate of return. Inflation is expected to be 2%. ABC stock commands a 6% risk premium. What is the risk-free rate of return? An investment produced annual rates of return of 5%, 12%, 8% and 11% respectively ..

What is the price of put option with same exercise price : A call option is currently selling for $4.30. It has a strike price of $35 and five months to maturity. The current stock price is $37, and the risk-free rate is 3.8 percent. The stock will pay a dividend of $1.65 in two months. What is the price of ..

Child care payments and any allowable child care credit : Susan Beale is a single mother with two children, ages three and six. She pays a total of $7,000 each year to a neighbor to care for her children while she works. how should she report the child care payments and any allowable child care credit?

Sell specified asset at agreed-upon price : A financial contract that gives its owner the right, but not the obligation, to buy or sell a specified asset at an agreed-upon price on or before a given future date is called a(n) _____ contract.

Variance of the portfolio-expected return of the portfolio : Consider the following information: Rate of Return If State Occurs State of Probability of Economy State of Economy Stock A Stock B Stock C Boom .18 .353 .453 .333 Good .42 .123 .103 .173 Poor .32 .013 .023 −.053 Bust .08 −.113 −.253 −.093. What is t..

Considering either leasing or buying microcomputer system : A firm is considering either leasing or buying a microcomputer system. If purchased, the initial cost will be $250,000; annual operating and maintenance costs will be $80,000/year. Based on a 6-year planning horizon, it is anticipated the computer wi..

Needs fixed income for the next ten years : Grandpa Russ thinks he needs a fixed income for the next 10 years. He currently has $10,000 in CDs, which are maturing at the end of this month. What is the maximum price you should tell Grandpa to pay for each bond? What else would you advise Grand..

Shares of common stock outstanding. : Sand Key Development Company has a capital structure consisting of $20 million of 10% debt and $30 million of common equity. The firm has 500,000 shares of common stock outstanding. Sand Key is planning a major expansion and will need to raise $15 mi..

User Account

All Pages