What is the traders gain or loss

Assignment Help Financial Management
Reference no: EM131044223

A trader enters into a one-year short forward contract to sell an asset for $60 when the spot price is $58. The spot price in one year proves to be $63. What is the trader’s gain or loss? Show a dollar amount and indicate whether it is a gain or a loss. Show all steps.

Reference no: EM131044223

Questions Cloud

What is the accounting equation : QUESTION 1. What is the accounting equation? QUESTION 2. Do you use debit or credit to increase an asset?
What problems nike faced on instagram : Prepare a at least 2 pages paper(double spaced, 1" margins) which to evaluate social media activities of nike. Just need to evaluate activities on instagram. Please follow these questions. What problems nike faced on instagram? How to solve these ..
Contrast social media and social networks : o Compare and contrast social media and social networks. o Correctly identify social media cites or social networks.
Calculate your portfolios new beta : Your retirement fund consists of a $7,500 investment in each of 20 different common stocks. The portfolio's beta is 1.75. Now, suppose you sell one of the stocks with a beta of 1.0 for $7,500 and use the proceeds to buy another stock whose beta is 1...
What is the traders gain or loss : A trader enters into a one-year short forward contract to sell an asset for $60 when the spot price is $58. The spot price in one year proves to be $63. What is the trader’s gain or loss? Show a dollar amount and indicate whether it is a gain or a lo..
Calculate the value of the bond : You own a bond with a par value of $1000 that pays a $100 annual coupon. The bond matures in 15 years. Your required rate of return is 12% p.a. Calculate the value of the bond
Statistical thinking in health care : Ben Davis had just completed an intensive course in Statistical Thinking for Business Improvement, which was offered to all employees of a large health maintenance organization.
Real risk-free rate : Real Risk-Free Rate You read in The Wall Street Journal that 30-day T-bills are currently yielding 5.8%. Your brother-in-law, a broker at Safe and Sound Securities, has given you the following estimates of current interest rate premiums:
What is its break-even point in units : XYZ, Inc. pays $105,000 in rent for its factory, and its factory manager receives annual compensation of $100,000. It sells the units produced at $10 a unit. If the raw material costs are $1.95 and the direct labor costs are $2.20 per unit. what is i..

Reviews

Write a Review

Financial Management Questions & Answers

  Compute the return on incremental investment

Slow Roll Drum Co. is evaluating the extension of credit to a new group of customers. Although these customers will provide $180,000 in additional credit sales, 12 percent are likely to be uncollectible. Compute the return on incremental investment.

  What is the portfolios expected return

A portfolio is invested 19 percent in Stock G, 34 percent in Stock J, and 47 percent in Stock K. The expected returns on these stocks are 8.5 percent, 11 percent, and 16.4 percent, respectively. What is the portfolio’s expected return?

  What is the portfolios beta-invested in Stock

Bill Dukes has $100,000 invested in a 2-stock portfolio. $35,000 is invested in Stock X and the remainder is invested in Stock Y. X's beta is 1.50 and Y's beta is 0.70. What is the portfolio's beta?

  Profit margin and total asset turnover remain unchanged

The board of directors is dissatisfied with lasy year's ROE of 15%. if the profit margin and total asset turnover remain unchanged at 8% and 1.25 respectively, by how much must he total debt ratio (D/A) increase to achieve a 20% ROE?

  Financial calculators do not operate in this way

If we input a positive PV in our calculator, we get a negative FV if that is what we are solving for. The reverse it true as well. Put in a positive, and the answer is negative. This is true of all financial calculators and is referred to as the ____..

  Debt must be repaid in two equal instalments

Digital Organics (DO) has the opportunity to invest $0.98 million now (t = 0) and expects after-tax returns of $580,000 in t = 1 and $680,000 in t = 2. The project will last for two years only. The appropriate cost of capital is 14% with all-equity f..

  Disadvantage of partnership form of business organization

Each of the following is a disadvantage of the partnership form of business organization EXCEPT

  Plans to issue bonds to raise-flotation costs

Moms Motel Corporation (MM) plans to issue bonds to raise $175 million that it needs to support future operations. MMs investment banker will charge 2.5 percent of the total amount issued to help MM raise the funds. In addition, MM will incur other c..

  Compute the payback statistic for project

Compute the payback statistic for Project A and recommend whether the firm should accept or reject the project with the cash flows shown below if the appropriate cost of capital is 8 percent and the maximum allowable payback is four years.

  Define environment and general good of society

In particular do you think subjects like customer and employee safety, environment and general good of society fits in this framework or they essentially ignored?

  Problem 1on completion of mba eddie and mike were so

problem 1on completion of mba eddie and mike were so pleased with the amount of useful and interesting knowledge that

  Sequence of prices for a currency futures contract

Consider the following sequence of prices for a currency futures contract. Each contact involves 10,000 units of the foreign currency. The initial and maintenance margin requirements are USD 800 and USD 500, respectively.

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