What is the profit from closing out the futures position

Assignment Help Accounting Basics
Reference no: EM133050711

Question - A fund manager expects to have funds to invest in three months' time and plans to buy $4 million corporate bonds, currently yielding 7.00% p.a. The manager hedges their interest rate risk using three-year Treasury bond futures contracts, currently priced at 94.500. In three months' time the fund manager buys $2 million corporate bonds at yield of 6.84% p.a. and closes out their futures market position at 95.250. What is the profit from closing out the futures position?

Reference no: EM133050711

Questions Cloud

Calculate the forward rate offered by the bank : Given the following (simplified) data, One-month French interest rate: 4.65% p.a. calculate the forward rate offered by the bank
Define subject records management : 1. Define subject records management, and explain why this system is the best choice for filing certain records. (Obj. 1)
How long will it take them to double the initial deposit : An investor deposits $4000. How long will it take them to double the initial deposit if the investment earns a simple interest rate of 9.8% per annum
Agreements and arrangements for advertisements : What currently are the most innovative agreements and arrangements for advertisements/sponsorships? Provide a specific example.
What is the profit from closing out the futures position : In three months' time the fund manager buys $2 million corporate bonds at yield of 6.84% p.a. What is the profit from closing out the futures position
What is the total cost of option : The Austin, Texas plant of Computer Products produces disk units for personal and small business computers. Gerald Knox, the plant's production planning direct
Determine the cost of goods sold : K-tel Industries had the following activity with one of its inventory items during the current period: Determine the cost of goods sold
Monitor and manage sustainability performance : Please select a company, examine what metrics and analytical tools this company used to monitor and manage sustainability performance and if the results were/ar
Evaluation of the skills you used : Prepare a project plan that identifies key milestones and critical pathways - prepare a report that presents all of your research findings.

Reviews

Write a Review

Accounting Basics Questions & Answers

  Which first stage when auditor considers the use of expert

Which first stage when an auditor considers the use of an expert is? Determining the scope of the work to be carried out. / Assessing the expert's report

  The charter of a corporation provides for the issuance

the charter of a corporation provides for the issuance of100000 shares of common stock. assume that 40000 shares

  Calculate the working capital and current ratio

Sales during the year was $250,000. Accounts receivable in 2018 were 35,000. Calculate the working capital and current ratio

  Evaluate the primary ethical standards of the accounting

Evaluate the primary ethical standards of the accounting organization's leadership and values which contributed to approval of the accounting issues.

  Should the company make or buy

A company, with no idle capacity, can manufacture a component with variable costs of £5.00 per unit. To purchase the unit from an outside supplier the price.

  What are the options for acting

What are the options for acting? Have all the relevant persons and groups been consulted?While reviewing the current-year audit working papers

  What is their taxable income

George also received $5,000 from WalMart where he works a greeter. What is their taxable income if George is age 66 and Weezy is age 64

  Which of the statements about standard costs is false

Which of the statements about standard costs is FALSE? Standard costs fit naturally in an integrated system of responsibility accounting

  Compute the adjusting entry required at december

An estimated P27,000 of the December 31, 2018, accounts receivable would prove uncollectible. Compute the adjusting entry required at December

  Compute the percentage of allowance for doubtful accounts

Compute the percentage of the allowance for doubtful accounts to the accounts receivable for MGM. Round to one decimal place

  Computer inventory assuming that solar value procedures

Compute the inventory value at Dec 31 each year under th dollar Value method assuming new layers are valued using the average price index

  What amount should findley charge to expense

What amount should Findley charge to expense during 2018, assuming amortization is recorded at the end of each year

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